U.S. Trade Deficit Deepens in December, But Improves Overall in 2013

The U.S. foreign trade deficit deteriorated to $38.7 billion during December compared to a revised $34.6 billion in November, last month reported as $33.4 billion. A $36.0 billion deficit had been expected in the Action Economics survey. For all of last year, improved exports and lower oil prices combined to lower the trade deficit to $471.5 billion, its lowest since 2009. A 1.8% drop (+1.4% y/y) in exports caused the December deficit deterioration. For all of last year, however, the 2.8% gain was the fourth consecutive year of increase. December imports nudged 0.3% higher (1.3% y/y) yet for the full year ticked 0.1% lower, the first decline in four years. In chained 2009 dollars, the deficit in goods deteriorated in December to $49.5 billion and improved to $573.0 billion for the full year. Real exports fell 3.6% last month (+0.7% y/y) but for the full year rose 2.6%. Real imports in December ticked up 0.1% (2.6% y/y) and rose 1.0% for all of 2013.

While export component series showed yearend weakness they improved y/y. The constant dollar value of auto exports fell 5.9% (+1.0% y/y) and the real value of nonauto consumer goods exports declined 4.3% (+2.1% y/y). Real capital goods exports were down 2.4% (-0.0% y/y) but real exports of foods, feeds & beverages gained 1.8% (22.4% y/y). Services exports improved 1.3% (4.5% y/y). Travel exports gained 3.9% (12.0% y/y) as the dollar's value encouraged U.S. visits. Passenger fares increased 6.3% (11.3% y/y).

The value of U.S. petroleum imports gained 2.0% (-5.1% y/y) in December. The quantity of petroleum product imports rose 7.2% (0.4% y/y) but the price of crude oil backed off 3.5% m/m to $91.3, down from the $109.69 high reached in April 2012. In constant dollars, nonpetroleum imports slipped 0.2% (+3.5% y/y). Real automotive imports declined 3.3% (+6.8% y/y); real imports of foods, feeds and beverages fell 1.1% (-2.2% y/y); and real capital goods imports were off 0.6% (+4.8% y/y). Real nonauto consumer goods imports increased 1.6% at yearend (2.7% y/y). Services imports increased 0.9% (3.5% y/y). Travel imports jumped 3.9% (10.9% y/y) and passenger fares gained 7.5% (19.1% y/y).

The December trade deficit in goods with mainland China improved sharply to $24.4 billion. Exports to China jumped 26.9% y/y while imports rose 7.8% y/y. With Japan, the deficit deepened slightly to $6.0 billion. U.S. exports fell 12.4% y/y but imports were down 4.7% y/y. The deficit with the European Union deepened to $11.3 billion. U.S. exports declined 3.5% y/y while imports rose 5.8% 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 consensus survey, which is carried in the AS1REPNA.