U.S. September Trade Deficit Improves

The September U.S. foreign trade deficit improved to $44.0B following its little-revised deterioration to $46.5B during August. The figure was narrower than expectations for $45.0B. For all of Q3 the deficit averaged $44.4B versus $43.9B during Q2. The September improvement resulted from a 0.3% uptick (14.8% y/y) in exports and a 1.0% decline (+17.0% y/y) in imports. In constant dollars, the deficit was roughly stable m/m at $49.9B as exports rose 11.4% y/y and imports increased 14.5%.

The gain in total, nominal  exports was led by an 8.8% jump (38.2% y/y) in "other" exports followed by a 5.1% gain (23.5% y/y) in food & beverages. Exports of nonauto consumer goods rose 1.1% (8.8% y/y) and capital goods exports nudged up 0.7% (15.0% y/y). Exports of commercial aircraft & parts soared by one-third m/m (-15.1% y/y) but that was offset by a 9.9% decline (+21.2% y/y) in computers. Also on the weak side were exports of industrial supplies & materials which fell 2.7% (+18.7% y/y) and autos & parts exports, down 1.4% (+22.05 y/y). The lower value of the dollar continued to encourage visits to the U.S. and pushed up travel exports by 14.8% y/y while passenger fares rose more than one-quarter versus last year. Exports of other private services rose 7.1% versus 2009.

The monthly decline in imports was led by a 6.7% drop in motor vehicles though they still were up by one-quarter y/y. Imports of "other" goods dropped 6.0% (-4.4% y/y) while nonauto consumer goods fell 4.4% (+14.6% y/y) and reversed an August increase. Capital goods imports increased 3.3% (28.1% y/y). The value of all energy-related products fell 8.8% (+7.2% y/y) with lower crude oil prices. The per barrel cost of crude petroleum slipped m/m to $72.36 (+6.1% y/y). The quantity of petroleum imports nudged up just 0.9% y/y. Imports of services gained 0.8% (8.4% y/y) as travel abroad rose 5.8% y/y and passenger fares jumped 15.6% y/y. Other private services imports including education services, financial services, insurance premiums and losses, telecommunications services and business, professional & technical services rose 3.5% y/y.

By country, the trade deficit with mainland China improved slightly to $27.8B. Trade with China surged as exports and imports both jumped by roughly one-quarter versus last year. The trade deficit with Japan improved slightly to $5.0B from its deepest since October 2008. Imports rose by 16.6% y/y with U.S. economic recovery, though that rate of increase slowed, and exports also rose by 12.2%. With the European Union, the trade deficit narrowed sharply to $6.1B as imports increased 12.2% y/y and exports rose a like 12.6%.

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database.