The U.S. trade deficit unexpectedly sank in February to a four-plus-year monthly low, and even though most of the improvement came outside the petroleum sector, the monthly oil shortfall fell to its smallest total since 2002.
Total exports and imports both hit multi-year monthly lows, too, along with high tech goods deficit, and merchandise exports to China. Surprisingly, despite weak currencies, goods shortfalls with the Eurozone and Japan fell month-to-month in February. At the same time, the January total deficit was revised up by an unusual near-$1 billion, mainly on higher imports
Here are the highlights of this morning’s Census Bureau report on February U.S. trade:
>The February overall deficit of $35.44 billion was 16.95 percent less than the January figure, and represented the best monthly U.S. performance since October, 2009.
>Goods and services exports fell to their smallest monthly combined total since October, 2012, while imports have not been this meager since April, 2011.
>The domestic energy production revolution and plunge in oil prices continued driving down the U.S. oil trade deficit. Its $8.07 billion total – down (24.51 percent) from January’s $10.69 billion – marked the best such level since June, 2002. But most of the trade balance’s improvement in February in absolute terms came in the non-oil goods deficit, which narrowed by nearly $5 billion month-to-month (9.53 percent).
>Also setting multi-year records: First, the monthly U.S. trade deficit in high tech goods plummeted from $4.17 billion in January to $3.13 billion in February, its lowest total since January, 2010. Both exports and imports declined.
>Second, U.S. merchandise exports to China decreased from $9.52 billion in January to $8.70 billion, an 8.61 percent decrease that brought the level to its lowest since August, 2012. U.S. goods imports from China fell even more on month – from $38.16 billion to $31.24 billion (18.13 percent) – but even this decline was not enough to bring the deficit ($22.54 billion) even close to a recent low.
>Third, the volatile high-tech goods trade deficit came in at $3.13 billion in February, down 37.02 percent from January levels to turn its its best performance since January, 2010. Exports and imports both fell in this sector, too.
>U.S. merchandise deficits with the Eurozone and Japan fell as well in February, but even though they remained above all-time lows, too, their decline was surprising given how weak their currencies have been versus the U.S. dollar.
>The trade shortfall with the Eurozone fell from $8.03 billion in January to $7.90 billion, as American goods exports to the economically trouble region actually inched up and imports dipped. The gap with the Eurozone is up, however, on a year-on-year basis.
>The equally chronic U.S. merchandise deficit with Japan decreased by nearly 27.50 percent in February from the January level. At $4.18 billion, it represented the smallest goods gap with Japan since April, 2011. The merchandise deficit with Japan was down year-on-year, too.
>America’s chronic trade deficits with recent free trade partner, Korea, and in manufacturing improved month-on-month as well, but did not reach multi-year lows.
>The monthly Korea goods deficit was cut nearly in half in February – to $1.65 billion. But the January total of $3.07 billion was an all-time high. The shortfall was only $564 million in March, 2012, when the U.S.-Korea free trade agreement went into effect.
>The massive U.S. manufacturing trade deficit dropped from $62.83 billion in January to $52.29 billion, as both exports and imports declined. But despite the 16.78 percent improvement, the manufacturing trade deficit is still running 13.35 percent ahead of last year’s record pace.
>Casting a small shadow over the February trade numbers was the large upward revision to the January total – from the $41.75 billion originally reported. $754 million of the total $924 million revision came from a higher combined goods and services import total.