U.S. Trade Deficit Declines

The U.S. trade deficit in goods and services narrowed at year-end, but deepened slightly in all of last year. The December deficit fell to $44.3 billion from $45.7 billion during November, revised from $45.2 billion. A $45.0 billion deficit had been expected in the Action Economics Forecast Survey. For 2016, the deficit eased to $502.3 billion. Total exports increased 2.7% at yearend (4.2% y/y), following a 0.2% November slip. Exports for the year declined 2.3%. Overall imports gained 1.5% (4.6% y/y), but fell 1.8% for the full year. Lower petroleum imports accounted for the declines, with a 0.3% easing (+14.1% y/y), but were down 19.5% for the full year. Non-petroleum imports increased 2.2% in December (4.2 y/y), but declined 1.2% for the year.

Exports of goods jumped 4.1% (5.4% y/y) at yearend, driven by a 7.9% surge (3.0% y/y) in capital goods exports. Industrial supplies & materials exports increased 2.1% (11.3% y/y). The gain followed y/y declines through August. Exports of motor vehicles & parts improved 1.4% (0.1% y/y). Nonauto consumer goods exports gained 0.5% (-1.7% y/y), but food exports fell 0.9% (+7.6% y/y).

Services exports grew 0.4% (2.2% y/y), about the same as during the prior month. Travel exports grew 0.4% ( 2.9% y/y), and charges for intellectual property eased 0.1% (-2.9% y/y).

Imports of goods increased 1.9% (4.8% y/y), reflecting a 0.3% dip (+14.1% y/y) in petroleum imports. The quantity of petroleum imports fell 2.6% (-3.5% y/y), while the per barrel cost of crude oil rose slightly to $41.45. The value of non-petroleum imports increased 2.2% (4.2% y/y). Imports of autos & parts increased 5.5% (2.6% y/y) while the value of foods, feeds & beverages imports increased 1.4% (6.9% y/y). Consumer goods imports gained 0.3% (2.7% y/y).

Services imports were roughly unchanged (+3.7% y/y). Travel imports eased 0.1% (+6.5% y/y), while transport imports fell 0.4% (+2.2% y/y).

By country, the trade deficit with China fell to $27.8 billion in December from $30.5 billion the month before. U.S. exports to China fell 4.1% m/m (+14.9% y/y), while imports declined 7.6% (+3.6% y/y). The trade deficit with Japan deepened to $6.5 billion. Exports rose 4.1% (19.0% y/y), while imports increased 7.6% (7.8% y/y). The trade deficit with the European Union (EU-28) narrowed to $12.2 billion as exports increased 10.1% (5.4% y/y) and imports decreased 1.2% (-0.8% y/y). These country data are not seasonally adjusted.

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.