U.S. Trade Deficit Deepens Slightly

The U.S. foreign trade deficit in goods and services during May grew to $41.9 billion from $40.7 billion in April, revised from $40.9 billion. A deficit of $42.0 billion had been expected in the Action Economics Forecast Survey. In constant dollars, the trade deficit in goods deepened to $58.4 billion from $56.9 billion. Real exports of goods eased 1.9% (-0.5% y/y) while real goods imports declined 0.5% (+3.7% y/y). During all of the second quarter, deterioration in the foreign trade deficit subtracted 1.9 percentage points from real GDP growth, the most since early-1985.

Imports eased 0.1% (-3.7% y/y) following a 3.3% decline in April. Nonpetroleum goods imports fell 0.2% (+1.9% y/y) as foods, feeds & beverages imports fell 3.5% (-2.5% y/y). Capital goods imports were off 1.5% (+0.4% y/y) and industrial supplies & materials imports also fell 1.5% (-27.6% y/y). Automotive vehicles & parts imports rose 3.0% (3.0% y/y) but nonauto consumer goods imports were unchanged (+2.3% y/y). Imports of services gained 0.3% (3.3% y/y) as travel imports nudged 0.2% higher (4.4% y/y).

Petroleum imports fell 0.5% in May (-45.8% y/y) after a 1.3% rise. In constant dollars, petroleum imports declined 4.0% (-2.6% y/y). The average per barrel cost of crude oil improved to $50.76 (-47.2% y/y). The value of energy-related petroleum product imports slipped 0.6% (-47.1% y/y) as their quantity declined 10.0% (-5.1% y/y).

Overall exports eased 0.8% (-4.4% y/y) as goods exports were off 1.3% (-7.5% y/y). Capital goods exports retreated 5.2% (-2.9% y/y). Exports of industrial supplies & materials rose 2.2% (-11.8% y/y) and auto exports gained 0.8% (-6.7% y/y). Foods, feeds & beverage exports increased 1.7% (-10.4% y/y) but consumer goods exports eased another 0.5% (-4.3% y/y). Services exports improved 0.2% (1.5% y/y) as travel exports gained 0.3% (1.1% y/y).

By country, the trade deficit in goods with China deepened m/m to $30.5 billion. Exports fell 5.0% y/y while imports rose 3.0% y/y. The deficit with Japan lessened significantly m/m to $5.3 billion. Exports eased 0.4% y/y but imports gained 2.0% y/y. The trade deficit with the European Union was little-changed m/m at $12.5 billion. Exports slipped 0.8% y/y and imports declined 2.5% 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 the AS1REPNA.

The emerging labor shortage was evidenced by the job openings rate during April. It gained m/m to 3.7%, up from the recession low of 1.6%. It was just below the series' high of 3.8% early in 2001. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. Failing to keep pace, however, was the hires rate. It fell to 3.5% and has been trending sideways for the last year. The hires rate is the number of hires during the month divided by employment. The Bureau of Labor Statistics reports these figures in its Job Openings & Labor Turnover Survey (JOLTS).

The actual number of job openings surged 21.7% y/y to 5.376 million versus 5.109 million in March, revised from 4.994 million. Hiring was less strong as it posted a 4.5% y/y increase to 5.007 million. That was down from 5.088 million in March, revised from 5.067 million.

The private-sector job openings rate jumped to 3.9% and was improved from the recession low of 1.7%. The rate in professional & business services rose to a recovery high of 5.1% while the rate in leisure & hospitality held at 4.7%, nearly the cycle high. In health care & social services, the rate jumped m/m to an eight-year high of 4.7% and in trade, transportation & utilities, it surged to a record high of 3.5%. The rate in the factory sector held steady for the third month at an elevated 2.6% but the construction sector's rate fell to 2.3%. The job openings rate in the government sector remained at 2.2%, higher than the 2009 low of 1.1%.

The private sector hires rate slipped to 3.9% and has been trending sideways for a year. Amongst leisure & hospitality firms, the rate continued its sideways trend with a slip to 6.1%. The rate in professional & business services did the same with a drop to 5.3%. The construction sector rate gained marginally to 5.1% but remained down from its December high of 7.0%. In retail trade it fell to 4.6%, nearly its lowest since early last year. The hiring rate in education & health services continued moving sideways at 2.7% and in the factory sector, it held at 2.1%. In the government sector, the hiring rate held at 1.5%.

The number of hires declined 1.6% m/m (+4.5% y/y). Private sector hires fell 1.9% (+3.8% y/y). Trade, transportation & utilities jobs declined 1.1% y/y. That was offset by a 7.2% rise in construction employment and a 7.8% increase in leisure & hospitality hiring. Health care & social services employment improved 0.6% y/y while professional & business services jobs increased 4.9% y/y. Factory sector jobs improved 2.0% y/y while government sector hiring jumped 16.1% y/y.

The job separations rate slipped from its recovery high to 3.5% but the actual number of separations increased 7.9% y/y. Separations include quits, layoffs, discharges, and other separations as well as retirements. The private sector separations rate fell to 3.8% while the government sector's rate held at the five-year high of 1.5% for the fourth straight month. The layoff & discharge rate held at 1.3%, the highest level since July. The private sector layoff rate slipped to 1.4% but the government's rate held at 0.5% for the sixth consecutive month.

The JOLTS survey dates to December 2000 and the figures are available in Haver's USECON database.

Gasoline prices eased last week to an average $2.80 per gallon at the pump (-24.4% y/y) but remained higher than the low of $2.04 late in January. Haver Analytics constructs factors adjusting for the seasonal variation in pump prices. The seasonally adjusted price moved 2 cents higher to $2.71 per gallon. They remained, however, below the cost at the pump since prices typically are stronger during the summer driving season. Spot market gasoline prices held w/w at $2.10 per gallon (-28.9% y/y).

WTI crude oil costs firmed to an average $60.13 per barrel (-43.6% y/y), up versus the March low of $44.39. Yesterday, prices eased to $58.33 per barrel. These prices compare to a June 2014 high of $107.95. The seasonally adjusted price, generated by Haver Analytics, improved last week to $58.88 per barrel. Brent crude oil prices were fairly stable at $60.84 per barrel but fell to $59.03 yesterday.

Natural gas prices fell to $2.79 per mmbtu last week (-38.0% y/y) and were $2.80 yesterday.

Gasoline demand improved 4.5% y/y and demand for all petroleum products rose 7.2% y/y. Gasoline inventories grew 1.6% y/y and inventories of all petroleum products increased 7.2% y/y.

The energy price data are reported by the U.S. Department of Energy. The petroleum demand and inventory figures are from the Oil & Gas Journal Weekly. These data can be found in Haver's WEEKLY database. The daily figures are in DAILY and greater detail on prices, demand and production, along with regional breakdowns, are in OILWKLY.