U.S. Trade Deficit Improves Sharply

These foreign trade figures add to the preliminary numbers released one week ago by including trade in services and data by country.

The U.S. foreign trade deficit in goods and services during September declined to $40.8 billion during September from $48.0 billion in August, revised from $48.3 billion. A deficit of $41.3 billion had been expected in the Action Economics Forecast Survey. Exports increased 1.6% (-3.7% y/y) and imports declined 1.8% (-4.0% y/y). In constant dollars, the trade deficit in goods lessened to $57.2 billion from $63.0 billion. Real exports of goods rebounded 3.0% (1.3% y/y) to the highest level in nine months while real goods imports declined 1.2% (+5.2% y/y) after a 2.9% increase.

The increase in exports reflected a 2.2% rise in goods, but they still were off 6.7% y/y. In constant dollars, the rise in goods exports occurred as auto exports recovered 1.4% (-3.6% y/y) following a 3.9% decline. Nonauto consumer goods exports recovered 8.3% (5.6% y/y) following declines in five of the prior six months. Foods, feeds & beverages exports jumped 5.3% (4.7% y/y) following a 0.6% uptick. Industrial supplies & materials exports improved 2.0% (1.9% y/y) and reversed the prior month's decline. Capital goods exports gained 1.9% (-1.2% y/y) following two months of 0.4% increase. Services exports improved 0.1% (3.2% y/y) as travel exports gained 0.8% (4.7% y/y) but charges for the use of intellectual property rights fell 0.3% (-2.2% y/y), down for the fourth straight month.

Imports of goods declined 2.3% during September (-5.8% y/y) and reversed a 1.6% increase during August. In constant dollars, nonpetroleum goods imports fell 1.7% (+4.7% y/y) after a 3.3% jump. Nonauto consumer goods imports eased 1.0% (+10.1% y/y) after an 8.4% rise. Capital goods imports fell 2.1% (+0.3% y/y) following a 2.4% improvement. Foods, feeds & beverages imports gained 1.4% (4.0% y/y) after a 0.8% gain. Industrial supplies & materials imports increased 1.2% (2.7% y/y) after a 0.4% easing and automotive vehicles & parts imports fell 2.8% (+7.7% y/y) after a 1.4% shortfall. Imports of services improved 0.3% (3.3% y/y) as travel imports increased 1.3% (12.4% y/y). Charges for use of intellectual property eased 0.1% (-7.2% y/y).

Petroleum imports declined 8.3% in September (-47.7% y/y) after an 11.6% decline. All of the decline was due to lower prices. In constant dollars, petroleum imports increased 4.5% (7.8% y/y). The average per barrel cost of crude oil fell to $42.72 (-53.8% y/y). The value of energy-related petroleum product imports was off 8.5% (-48.8% y/y) but their quantity increased 5.1% (6.7% y/y).

By country, the trade deficit in goods with China deepened to a record $36.3 billion. Exports to China rose 1.2% y/y while imports from China gained 1.7% y/y. The deficit with Japan increased slightly to $5.2 billion. Exports to Japan declined 13.9% y/y and imports from Japan were off 8.5% y/y. The trade deficit with the European Union lessened m/m to $11.8 billion. Exports to the EU improved 3.9% y/y while imports from the EU rose 2.3% 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.