November’s U.S. trade figures underscore how strongly the recent narrowing in America’s chronic deficits has been driven by booming domestic energy production and therefore historic declines in the oil trade gap. The enormous goods deficit fell for the second straight month after hitting an all-time monthly high, and the manufacuring trade deficit also retreated after setting a monthly record. But a new all-time worst monthly trade deficit with Korea raises major questions about President Obama’s approach to the Trans-Pacific Partnership, as the 2012 Korea bilateral deal has been described by the administration as a model for the TPP.
Here are the specifics drawn from this morning’s Census Bureau report on November U.S. trade:
>The combined U.S. goods and services trade deficit dropped 7.69 percent in November to $39.00 billion, its lowest level since December, 2013. In addition, October’s originally reported total deficit of $43.43 billion was revised down to $42.25 billion.
>The $3.25 billion fall in the goods and services deficit resulted chiefly from the manufacturing deficit’s $8.75 billion retreat from the record $71.22 billion October level to $62.47 billion.
>A $3.77 billion monthly narrowing of the petroleum deficit also helped, but oil trade’s impact is made clear by the November deficit’s drop to $11.44 billion – the smallest monthly total since December, 2003. In addition, the $23.07 billion’s worth of November oil imports was the smallest monthly total since August, 2009.
>The oil effect is even more stunning after adjustments are made for inflation. In real terms, the November petroleum trade deficit of $7.57 billion was the lowest level since these figures started to be compiled in 1994. November’s $15.84 billion after-inflation oil imports were the lowest since March, 1996.
>Despite November’s improvement, the combined U.S. goods and services trade deficit for the first 11 months of 2014 is running 5.09 percent ahead of its 2013 rate. Goods and services exports are 2.88 percent higher than in January-to-November, 2013, and imports are 3.21 percent higher.
>Similarly, the $641.09 billion January-to-November, 2014 manufacturing trade deficit is 7.49 higher than the $596.42 billion 2013 total. And it is nearly as great as 2013’s record full-year $646.77 billion manufacturing trade deficit.
>The huge and chronic U.S. goods trade deficit with China dropped for the second straight month in November – to $29.94 billion from October’s $32.55 billion level which was the second highest on record. But the China goods gap is still 6.84 percent larger than 2013’s totals – which eventually produced an annual record – on a January-to-November basis.
>The U.S. merchandise deficit with Korea rose to a new monthly record in November as well, with the $2.80 billion shortfall eclipsing the previous high of $2.68 billion, reached in May.
>Since the U.S.-Korea free trade agreement went into effect in March, 2012, the monthly U.S. goods deficit has nearly quintupled on a monthly basis, from $564.2 million. American goods exports to Korea have sank from $4.22 billion to $3.50 billion since the deal’s implementation, while U.S. goods imports are up from $4.79 billion to $6.31 billion.
>In addition, the monthly U.S. trade deficit in high tech goods soared 24.19 percent in November to a 2014 record high and its second-highest level on record. The $11.38 billion gap trailed only November, 2012’s $11.72 billion. After lagging 2013’s levels for most of this year, the high tech trade deficit is now running ahead of last year’s level.