U.S. Trade Deficit Shrinks as Imports Fall Sharply

The U.S. trade deficit in goods and services declined to $47.20 billion during October from $51.10 billion in September, revised from $52.45 billion. It was the smallest deficit since May 2018. A $48.7 billion deficit had been expected in the Action Economics Forecast Survey. Exports slipped 0.2% (-1.4% y/y) after a 0.9% decline while imports weakened 1.7% (-4.7% y/y) after a 1.6% drop.

The trade deficit in goods fell to $$68.02 billion in October from $71.7 billion in September. It also was the smallest deficit since last May.

Imports of goods declined 2.2% (-6.7% y/y) as nonpetroleum imports fell 2.4% (-4.9% y/y). Automobile & parts imports weakened 5.8% (-8.6% y/y). Nonauto consumer goods imports dropped 4.4% (-7.4% y/y) and foods, feeds & beverages imports fell 2.9% (+0.7% y/y). Industrial materials & supplies imports eased 1.3% (-15.7% y/y). These declines were accompanied by a 0.7% rise (-0.9% y/y) in capital goods imports. Petroleum imports were little-changed (-24.6% y/y) as the price of crude oil per barrel fell to $52.00 per barrel (-15.1% y/y).

Exports of goods fell 0.5% (-3.6% y/y), led by a 4.3% drop (-6.5% y/y) in nonauto consumer goods imports. Foods, feeds and beverages declined 2.6% (+4.8% y/y). Auto exports were off 2.3% (+1.3% y/y) while industrial supplies exports rose 1.3% (-5.7% y/y). Capital goods exports eased 0.9% (-5.3 y/y).

The surplus on trade in services rose to $20.8 billion, but remained below the March 2018 peak of $22.8 billion. The value of services exports gained 0.5% (3.2% y/y). Tourism exports rose 0.6% (0.3% y/y), a gain which compares to 7.1% y/y growth early last year. Charges for intellectual property exports improved 0.6% (2.5% y/y). Imports of services grew 0.2% (4.1% y/y). Tourism imports improved 0.8% (4.0% y/y) after 7.0%-to-9.0% growth during the last five years. and intellectual property imports rose 0.8% (2.3% y/y).

The trade deficit with China narrowed to $27.8 billion (SA) billion in October from $38.2 billion twelve months earlier. Exports to China slumped 17.0% (-0.7% y/y). Imports fell 4.8% (-22.9% y/y), the fifth consecutive monthly decline. The trade deficit with the European Union shrank to $14.2 billion, the least since February. Exports increased 1.6% (7.5% y/y) while imports fell 2.0% (+3.8% y/y). The trade deficit with Japan narrowed sharply to $4.5 billion, the smallest since June 2011. Exports rose 9.6% (-0.5% y/y) while imports declined 7.4% (-9.6% 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.