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Economy in Brief

U.S. Goods Trade Deficit Widens to New Record in January
by Sandy Batten  February 28, 2022

• Exports fell 1.8% m/m with a 12.5% m/m plunge in consumer goods.

• Imports rose 1.7% m/m, led by a rebound in food, feed and beverages.

The advance estimate of the U.S. international trade deficit in goods widened to a record $107.6 billion in January from $100.5 billion in December. The Action Economics Forecast Survey expected a January deficit of $99.3 billion. Exports of goods fell 1.8% m/m (+15.3% y/y) in January more than offsetting a 1.4% m/m gain in December while imports rose 1.7% m/m (+19.7% y/y) on top of a 2.1% m/m rise in December. The overall trade balance (that is, for both goods and services) was neutral for GDP growth in Q4 as the widening goods deficit was offset by an increase in the services surplus. The marked increase in the goods deficit in January offers a high hurdle for the services surplus to offset in Q1 and so, it is likely that the trade deficit will once again be a drag on overall economic growth.

The January decline in exports was relatively widespread. It was led by a 12.5% m/m plunge in exports of nonfood consumer goods that more than offset a 6.0% m/m jump in December. Auto exports fell 6.6% m/m in January, offsetting their 6.5% m/m increase in December. More encouraging was 2.2% m/m increase in nonauto capital goods exports in January on top of a 2.0% m/m gain in December.

The January increase in imports was nearly universal across major sectors with only the catch-all "other" category posting a decline (-15.3% m/m). Of the specific sectors, imports of foods, feeds and beverages jumped 8.6% m/m, more than offsetting a 4.6% m/m slump in December. Industrial supplies imports rebounded 2.4% m/m in January but fell well short of offsetting their 5.1% m/m decline in December. Exports of nonauto capital goods rose 1.9% m/m, their third consecutive monthly gain. Auto imports rose a solid 5.1% m/m, their fourth consecutive strong monthly increase.

The advance international trade data can be found in Haver's USECON database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.

Advance U.S. Foreign Trade in Goods (Census Basis) Jan Dec Nov Jan Y/Y 2021 2020 2019
U.S. Trade Balance ($ bil.) -107.63 -100.47 -97.32 -84.94 (1/21) -1,078.37 -911.06 -850.92
Exports (% Chg) -1.8 1.4 -1.8 15.3 23.1 -13.3 -1.4
Imports (% Chg) 1.7 2.1 5.0 19.7 21.3 -6.3 -1.7

Note: Current month is based on Advance Trade data; Previous months reflect revised data from International Trade release.

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