U.S. Trade Deficit Improves Modestly

The U.S. foreign trade deficit during March matched expectations and narrowed to $40.4 billion versus a February shortfall of $41.9 billion, last month reported as $42.3 billion. The deficit's easing reflected a 2.1% increase (5.0% y/y) in exports while imports gained 1.1% (5.9% y/y). In chained 2009 dollars, the deficit in goods improved slightly to $49.4 billion from $49.8 billion. Real exports of goods gained 2.3% (4.3% y/y) while real imports increased 1.4% (6.3% y/y).

The constant dollar value of automotive exports increased 4.9% (4.9% y/y) while real capital goods exports rose 4.6% (5.8% y/y). Real exports of industrial supplies & materials gained 1.7% (-1.5% y/y) but inflation adjusted consumer goods exports fell 1.8% (+12.6% y/y). Real exports of foods, feeds  beverages were off 1.7% (+14.0% y/y), down for the fourth month in the last five. Services exports notched 0.4% higher (6.0% y/y). Travel exports declined 1.2% (+5.9% y/y) as fewer tourists visited the United States. Passenger fares, however, recovered 2.8% (3.9% y/y).

The value of U.S. petroleum imports declined 3.4% (-0.3% y/y) and the quantity of petroleum product imports fell 2.3% (+1.7% y/y). The price of crude oil increased m/m to $93.91 per barrel, still down from the $109.69 high reached in April 2012. In constant dollars, nonpetroleum imports increased 2.2% (7.2% y/y). Real imports of foods, feeds and beverages jumped 6.7% (4.8% y/y) while real nonauto consumer goods imports rose 2.5% (9.7% y/y). Inflation adjusted capital goods imports gained 1.6% (7.8% y/y) but real auto imports ticked just 0.1% higher (7.9% y/y). Services imports declined 1.7% (4.8% y/y) and reversed February's increase. Travel imports fell 1.2% (+0.5% y/y), down sharply for the third straight month. Passenger fares declined 2.5% (+3.3% y/y).

The March trade deficit in goods with mainland China narrowed slightly to $20.4 billion, its least in twelve months. Exports to China jumped 14.8% y/y while imports also surged 14.3% y/y. With Japan, the trade deficit deepened modestly to $5.9 billion. U.S. exports improved 8.2% y/y but imports declined 1.3% y/y. The deficit with the European Union deepened sharply to $11.5 billion. U.S. exports increased 7.0% y/y but imports rose 9.8% 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 Forecast Survey, which is carried in the AS1REPNA.