U.S. Trade Deficit Is Widest Since June As Imports Rise

An improving U.S. economy is taking in more imports. That's the indication behind a deeper U.S. foreign trade deficit during December, deeper for the second month in a row. The deficit rose to $48.8B from a revised $47.1B in November, initially reported as $47.8B. Earlier figures were revised as well. Expectations had been for a December deficit of $48.0B, according to Action Economics. Exports rose 0.7% (9.0% y/y) but imports rose 1.3% (11.3% y/y). In chained 2005 dollars, the overall deficit in goods deepened to $47.7B; real exports rose 1.4% (5.4% y/y) while real imports increased 1.4% (4.3% y/y) as well.

Overall exports rose 0.7%, led by a 6.1% increase in automotive vehicles & parts (18.8% y/y). Exports of industrial supplies & materials also were strong, posting a 2.4% (16.6% y/y) gain, and foods, feeds & beverages rose 1.5% (0.6% y/y). Nonauto consumer goods exports slumped 6.4% (0.7% y/y) and reversed the prior month's rise, while capital goods exports slipped 0.4% (+5.6% y/y). Services exports ticked up 0.6% (8.3% y/y). Travel exports rose 1.4% (10.0% y/y) as more individuals visited the U.S., but passenger fares slipped 0.3% (+18.5% y/y).

Total imports rose 1.3% in December as goods imports jumped 1.4% (12.1% y/y). The gain was led by a 2.4% (11.6% y/y) increase in capital goods imports and a like gain in autos (15.8% y/y). Imports of nonauto consumer goods also posted a firm 2.2% rise (5.1% y/y). Imports of industrial supplies posted a slim 0.5% (16.9% y/y) gain. Imports of services increased 0.7% (7.2% y/y); travel imports rose 1.6% (6.5% y/y) as more U.S. citizens traveled abroad while passenger fares rose 2.4% (12.8% y/y).

The value of December's petroleum imports jumped another 6.4% (28.4% y/y) with higher prices. The cost of crude oil per barrel rose to $104.13, up from $79.79 a year earlier. However, during December, the quantity of energy-related petroleum imports fell 5.2% y/y.

By country, the December goods trade deficit with mainland China lessened again m/m to $23.1B. That was, though, still larger than the $20.7B twelve months earlier. Imports from China increased 6.6% y/y to $32.8B but U.S. exports fell 4.2% y/y to $9.7B. With Japan, the deficit deepened to $6.5B as exports fell 2.0% y/y and imports rose 4.7% y/y. The deficit with the European Union eased to $9.6B with a 2.5% y/y rise in exports to Europe and a 12.8% jump in imports from there.

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