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Economy in Brief

U.S. Trade Deficit Narrows Sharply to Five-Year Low
by Tom Moeller  April 2, 2015

The U.S. foreign trade deficit in goods and services declined to $35.4 billion during February from $42.7 billion in January, revised from $41.8 billion. A deficit of $41.8 billion was expected in the Action Economics Forecast Survey.

Imports declined 4.4% (-3.6% y/y) as petroleum imports were off 15.9% (-46.7% y/y) with lower crude oil prices. In constant dollars, crude oil imports fell 1.6% (-4.1% y/y). The average cost per barrel of crude oil fell to $49.53 (-45.9% y/y) from $58.96. The value of energy-related petroleum product imports fell 25.0% (-47.3% y/y) and their quantity declined 14.4% (-5.2% y/y).

Nonpetroleum imports declined 4.2% (+3.1% y/y), in part reflecting a labor dispute which shut down West Coast ports. The dispute has since been resolved. Imports of autos & parts fell 6.1% (+2.2% y/y) while capital goods imports declined 5.1% (+3.2% y/y). Nonauto consumer goods imports were off 3.1% (+3.8% y/y) and foods, feeds & beverage imports fell 3.1% (+3.8% y/y). Services imports ticked 0.1% higher (4.0% y/y) reflecting a 0.9% rise (11.4% y/y) in travel.

Overall exports fell 1.6% (-1.0% y/y), the sixth decline in the last seven months. Auto exports collapsed 8.7% (-5.7% y/y) and capital goods exports fell 3.6% (+0.4% y/y). Foods, feeds & beverage exports were off 1.5% (-11.9% y/y) but nonauto consumer goods exports increased 7.9% (7.0% y/y). Industrial supplies & materials exports declined 3.8% (-11.6% y/y). Services exports were little changed (+5.6% y/y) as travel exports gained 0.4% (6.9% y/y).

By country, the deficit in goods with China eased to $22.5 billion. Exports fell 11.9% y/y while imports increased 1.6% y/y. The deficit with Japan declined to $4.2 billion, its smallest since early 2011, as exports fell 5.4% y/y and imports were off 12.9% y/y. The trade deficit with the European Union was little-changed at 9.3 billion. Exports gained 6.2% y/y and imports rose 5.2% y/y.

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA.

Today's comments by Federal Reserve Chair Janet L. Yellen are available here.

Foreign Trade (Current Dollars) Feb Jan Dec Y/Y 2014 2013 2012
U.S. Trade Deficit $35.4 bil. $42.7 bil. $45.6 bil. $41.9 bil.
(2/14)
$504.7 $476.4 bil. $537.6 bil.
Exports (% Chg) -1.6 -3.0 -0.9 -1.0 2.8 2.9 4.2
Imports -4.4 -3.6 1.8 -3.6 3.4 0.1 2.9
  Petroleum -15.9 -21.9 7.2 -46.7 -9.7 -11.0 -5.5
  Nonpetroleum -4.2 -1.5 1.0 3.1 5.9 2.0 5.2
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