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Economy in Brief

U.S. Trade Deficit Declines as Imports Fall
by Tom Moeller  August 6, 2014

The U.S. foreign trade deficit during June eased to $41.5 billion from $44.7 billion in May. The deficit was the smallest since January and shallower than consensus estimates for $44.3 billion in the Action Economics Forecast Survey. The narrower deficit was the result of a 1.2% decline (+4.6% y/y) in imports countered by a 0.1% uptick (2.9% y/y) in exports.

The overall trade deficit in goods narrowed to $59.4 billion, its smallest since February, despite a wider deficit with mainland China. It deepened m/m to $30.1 billion, the largest shortfall in nine months. Exports to China rose 1.5% y/y but imports surged 9.8% y/y. The trade deficit with the European Union eased m/m to $11.2 billion. U.S. exports gained 7.8% y/y while imports rose 18.2% y/y. With Japan, the trade deficit fell m/m to $5.4 billion. U.S. exports slipped 0.5% y/y but imports declined 1.7% y/y.

In constant dollars, the trade deficit in goods fell to $48.8 billion, its least since February. Inflation adjusted exports gained 0.3% (1.9% y/y). The constant dollar value of nonauto consumer goods exports rose a steady 2.4% (5.8% y/y) while real auto exports improved 1.1% (7.2% y/y). They've risen significantly in three of the last four months. Real exports of industrial supplies & materials gained 0.8% but were unchanged y/y. Real foods, feeds & beverages exports notched 0.2% higher (9.8% y/y) while real capital goods exports were roughly unchanged (-0.6% y/y), off slightly during the last three months. Services exports edged 0.2% higher (3.5% y/y). Travel exports increased 1.1% (7.7% y/y) as more tourists visited the United States.

In constant dollars, nonpetroleum imports fell 1.1% (+6.5% y/y). Inflation adjusted foods, feeds and beverages imports increased 4.0% (9.7% y/y) but other imports declined. Real capital goods imports slipped 0.7% (+7.0% y/y). Real nonauto consumer goods imports fell 2.6% (+4.2% y/y) and real auto imports fell 3.7% (+7.3% y/y). Services imports ticked 0.1% higher (4.3% y/y) as travel imports gained 0.1% (8.3% y/y). The value of U.S. petroleum imports declined 4.9% (-7.5% y/y), about as it did in May. The quantity of petroleum product imports fell 4.4% (-8.4% y/y). The price of crude oil was roughly stable m/m at $96.41 per barrel, down from the $109.69 high reached in April 2012.

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.

The Low Frequency Effects of Macroeconomic News on Government Bond Yields from the Federal Reserve Board can be found here.

Foreign Trade (Current Dollars) Jun May Apr Y/Y 2013 2012 2011
U.S. Trade Deficit $41.5 bil. $44.7 bil. $47.0 bil. $36.6 bil.
$476.4 bil. $537.6 bil. $548.6 bil.
Exports (%) 0.1 1.1 -0.1 2.9 2.9 4.2 14.8
Imports -1.2 -0.1 1.1 4.6 0.1 2.9 13.9
  Petroleum -3.3 -5.1 -2.2 -6.9 -11.0 -5.5 30.7
  Nonpetroleum goods -1.1 0.5 2.1 6.9 2.0 5.2 12.1
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