Global| Sep 13 2005U.S. Trade Deficit Unexpectedly Narrowed
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. foreign trade deficit narrowed to $57.9B in July versus the June deficit of $59.4 which was deeper than initially reported. Consensus expectations had been for a deficit of $59.7B. Despite the narrowing, the U.S. trade [...]
The U.S. foreign trade deficit narrowed to $57.9B in July versus the June deficit of $59.4 which was deeper than initially reported. Consensus expectations had been for a deficit of $59.7B. Despite the narrowing, the U.S. trade deficit remained in record territory with the average during the last three months a record $57.8B.
Adjusted for price inflation, the customs value of the U.S. trade deficit narrowed to $54.6B, the narrowest since March.
Total exports rose a paltry 0.4% following two months of having been roughly unchanged. The 0.5% (10.6% y/y) rise in goods exports last month was again held back by a decline in food, feeds & beverages which fell 2.8% (+9.0% y/y). Capital goods exports rose 0.6% (8.3% y/y) though exports of advanced technology products fell 10.2% (NSA, +8.6% y/y). Nonauto consumer goods exports rose 0.5% (13.0% y/y)
Services exports rose 0.1% (10.1% y/y) for the second month.
The 0.7% decline in imports of goods & services was due mostly to a 2.2% decline in capital goods (+9.5% y/y) and a 2.2% (+7.8% y/y) decline in nonauto consumer goods. Imports of petroleum products rose 5.2% (45.5% y/y) as the average price of crude oil rose to $49.03 per bbl. (46.9% y/y). Imports of non-petroleum goods fell 1.4% (+7.6% y/y).
The US trade deficit with China remained about stable at $17.7B ($161.9B in 2004) but the US trade deficit with Japan improved slightly to $6.6B ($75.6B in 2004). The monthly trade deficit with the Asian NICs also narrowed slightly to $1.2B ($21.9B in 2004) but the deficit with the European Union deepened to $11.2B ($109.3B in 2004).
A Look at China's New Exchange Rate Regime from the Federal Reserve Bank of San Francisco is available here.
Also from the San Francisco Fed, Understanding the Twin Deficits: New Approaches, New Results can be found here.
| Foreign Trade | July | June | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Trade Deficit | $57.9B | $59.5B | $51.3B (7/04) | $617.6B | $494.8B | $421.2B |
| Exports - Goods & Services | 0.4% | 0.1% | 10.4% | 12.6% | 4.6% | -3.0% |
| Imports - Goods & Services | -0.7% | 2.1% | 11.3% | 16.6% | 8.5% | 2.1% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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