U.S. Trade Deficit Narrows to Three-Year Low

The U.S. trade deficit in goods and services declined to $43.09 billion during November from $46.94 billion in October, revised from $47.20 billion. It was the smallest deficit since October 2016. A $43.9 billion deficit had been expected in the Action Economics Forecast Survey. Exports improved 0.7% (0.3% y/y) after a 0.1% dip while imports weakened 1.0% (-3.8% y/y) following two months of even sharper decline.

The trade deficit in goods fell to $63.00 billion in November after a sharp reduction in October's deficit to $66.70 billion. It also was the smallest deficit since October 2016.

Imports of goods declined 1.4% (-5.7% y/y) as nonpetroleum imports fell 1.2% (-4.8% y/y). Capital goods imports declined 2.0% (-3.7% y/y) and nonauto consumer goods were off 1.9% (-4.5% y/y). Industrial materials imports fell 1.5% (-12.1% y/y) and imports of foods, feeds & beverages weakened 1.3% (+0.1% y/y). Countering these declines was a 3.7% rise (-5.9% y/y) in automobile & parts imports. Petroleum imports declined 3.2% (-15.3% y/y) as the price of crude oil per barrel eased to $51.92 (-9.8% y/y).

Exports of goods rose 0.8% (-1.4% y/y), led by a 3.3% increase (8.8% y/y) in automobile & parts exports. Nonauto consumer goods exports increased 2.9% but were unchanged y/y. Foods, feeds and beverages exports rose 1.8% (6.4% y/y) while capital goods exports strengthened 1.4% (-5.8% y/y). Showing weakness last month, exports of industrial supplies & materials eased 0.4% (-2.1% y/y).

The surplus on trade in services was steady at $20.8 billion, but remained below the March 2018 peak of $22.8 billion. The value of services exports gained 0.5% (3.8% y/y). Tourism exports rose 0.3% (0.2% y/y). Charges for intellectual property exports improved 0.4% (3.4% y/y). Imports of services grew 0.8% (4.7% y/y). Tourism imports improved 1.2% (3.4% y/y) and intellectual property imports rose 0.5% (2.5% y/y).

The trade deficit with China narrowed to $25.6 billion (SA) billion in November from $36.2 billion twelve months earlier. Exports to China rose 18.8% (19.9% y/y). Imports fell 2.2% (-21.6% y/y). The trade deficit with the European Union lessened to $13.5 billion (SA), the least in nine months. Exports fell 1.6% (+3.8% y/y) while imports declined 3.1% (+0.6% y/y). The trade deficit with Japan increased to $5.7 billion (SA). Exports fell 9.2% (-13.9% y/y) while imports rose 6.4% (-7.8% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in AS1REPNA.