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 job openings rate during May held steady at 3.6% as April's rate was revised lower from 3.7%. Both remained improved from the recession low of 1.6%. The latest was just below the series' high of 3.8% in January 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 was the hires rate, which fell to 3.5% from an upwardly revised 3.6%. Both readings were down from the December high of 3.7% 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 16.4% y/y to 5.363 million versus 5.334 million in April. Hiring growth eased to 4.1% y/y. May's level of 5.000 million was down from December's high of 5.239 million.

The private-sector job openings rate held steady at 3.9%, improved from the recession low of 1.7%. The rate in professional & business services rose to a recovery high of 5.3% while the rate in leisure & hospitality gained to 4.6%, just below the cycle high. In health care & social services, the rate eased from its eight-year high to 4.5% and in trade, transportation & utilities, it improved to a record high of 3.5%. The rate in the factory sector rose to 2.7%, the highest level since January 2001 and the construction sector's rate rose to 2.3%. The job openings rate in the government sector improved to 2.3%, higher than the 2009 low of 1.1%.

The private sector hires rate held at 3.9%, down from the December high of 4.1%. Amongst leisure & hospitality firms, the rate improved to 6.1% but the rate in professional & business services slipped to 5.1%. The construction sector rate eased to 5.0%, remaining down from the December high of 7.0%. In retail trade, it recovered m/m to 4.8%. The hiring rate in education & health services rose to 2.8% and in the factory sector, it declined to 1.9%, the lowest level since February of last year. In the government sector, the hiring rate held at 1.5% for the third month.

The number of hires declined 0.7% m/m (+4.1% y/y). Private sector hires fell 0.6% (+3.3% y/y). Trade, transportation & utilities jobs eased 0.6% y/y. That was accompanied by a 0.3% dip in construction employment and a 6.5% increase in leisure & hospitality hiring. Health care & social services employment improved 7.7% y/y while professional & business services jobs increased 5.8% y/y. Factory sector jobs eased 0.4% y/y but government sector hiring jumped 14.9% y/y.

The job separations rate plummeted to 3.3% but the actual number of separations increased 4.4% y/y. Separations include quits, layoffs, discharges, and other separations as well as retirements. The private sector separations rate fell sharply to 3.7% while the government sector's rate eased to 1.4% after four months at 1.5%. The layoff & discharge rate declined to 1.2%. The private sector layoff rate returned to its lowest level since November 2013 and the government's rate eased to 1.3%, equaling the lowest since October 2013.

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.