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Economy in Brief

U.S. Trade Deficit Narrows Sharply
by Tom Moeller  May 3, 2018

The U.S. trade deficit in goods and services declined to $48.96 billion during March from $57.74 billion in February, revised from $57.6 billion. It was the narrowest deficit in six months. A $52.3 billion deficit had been expected in the Action Economics Forecast Survey. Exports increased 2.0% (8.8% y/y) following an unrevised 1.7% gain. Imports declined 1.8% (+8.9% y/y) after an unrevised 1.7% rise.

The deficit on goods trade declined to $68.29 billion from a roughly ten year high of $75.81 billion. Exports of goods gained 2.9% (11.1% y/y) following a 2.3% rise. Exports of foods, feeds & beverages jumped 9.7% (7.4% y/y) following a 0.4% uptick (7.3% y/y). Capital goods exports gained 4.2% (9.1% y/y) after a 1.4% gain. Exports of industrial materials rose 2.2% (19.8% y/y) following a 4.8% increase. Nonauto consumer goods exports were up 0.9% (4.2% y/y) following a 4.7% fall. To the downside, exports of motor vehicles & parts fell 4.4% (+8.7 y/y) following a 6.7% gain.

Imports of goods declined 1.7% in March (+9.1% y/y) following a 1.6% gain. Foods, feeds & beverage imports fell 3.3% (+10.7% y/y) after a 6.4% rise. Capital goods imports were off 2.6% (+11.3% y/y) following a 3.2% increase. Industrial supplies & materials imports declined 1.5% (+9.1% y/y) after a 1.5% increase. Nonauto consumer product imports fell 1.7% (+10.9% y/y) following a 1.0% increase. Motor vehicle & parts imports gained 0.7% (2.5% y/y) after a 0.5% rise.

All non-petroleum goods imports declined 1.6% (+9.2% y/y) and reversed the prior month's rise. Petroleum imports decreased 2.6% (+7.9% y/y) following February's 1.1% rise. The per barrel cost of crude oil eased to $54.00 (+16.7% y/y) from $54.61 per barrel. Nevertheless, the value of energy-related petroleum product imports increased 9.6% (4.3% y/y) after a 17.0% decline. The quantity of energy-related product imports rose 10.7% (-12.0% y/y) after a 17.1% drop.

The surplus on services trade increased to $20.5 billion in March from $19.2 billion, but it was down sharply from $22.3 billion roughly three years ago. Services exports increased 0.6% (4.5% y/y), the same as in the prior month. Travel exports increased 0.6% (0.0% y/y) after a 0.3% gain. Charges for the use of intellectual property gained 0.5% (14.4% y/y) after a 0.7% rise. Transport exports gained 1.3% (7.1% y/y) following a 2.5% rise.

Imports of services weakened 1.9% (+8.6% y/y) after a 2.7% advance. Charges for the use of intellectual property retreated 18.1% (+8.9% y/y) after a 23.3% jump. U.S. residents' travel abroad rose 0.4% (6.0% y/y) following a 0.1% uptick. Transport charges fell  1.0% (+6.1% y/y) and reversed the prior month's increase.

By country, the goods trade deficit with China narrowed to $25.9 billion in March (NSA) after a $29.3 billion deficit in February. Exports rose 28.6% y/y while imports rose 11.8% y/y. The deficit with the European Union was little changed at $12.1 billion (NSA). Exports increased 16.2% y/y and imports rose 13.9% y/y. The trade deficit with Japan deepened sharply to $6.4 billion as exports rose 12.0% y/y and imports declined 1.2% 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 AS1REPNA.

Foreign Trade in Goods & Services (Current $) Mar Feb Jan Y/Y 2017 2016 2015
U.S. Trade Deficit $48.96 bil. $57.74 bil. $56.67 bil. $44.7 bil.
(3/17)
$568.44 bil. $504.79 bil. $500.44 bil.
Exports of Goods & Services (% Chg) 2.0 1.7 -1.3 8.8 5.6 -2.5 -4.7
Imports of Goods & Services (% Chg) -1.8 1.7 0.0 8.9 6.9 -1.9 -3.6
  Petroleum (% Chg) -2.6 1.1 20.8 7.9 27.0 -19.4 -45.5
  Nonpetroleum Goods (% Chg) -1.6 1.7 -1.8 9.2 5.7 -1.2 2.2
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