The goods and services U.S. trade deficit rose 8.68 percent in June, driven by an unprecedented 84.19 percent jump in the oil trade gap that broke a long pattern of dramatic energy trade improvement. The $44.51 billion combined goods and services shortfall was the largest monthly total since last August. The large, longstanding manufacturing trade deficit rose to $74.05 billion, just short of the record $74.69 billion hit last September. And thanks partly to its second biggest monthly total ever, the recovery-era growth-killing effects of the real Made in Washington deficit (in non-oil goods trade) stood at 19.70 percent as of the second quarter, or more than $437 billion.
Here are selected highlights of the latest monthly (June) trade balance figures released this morning by the Census Bureau:
>The U.S. goods and services trade deficit rose by 8.68 percent in June, from a downwardly adjusted May total of $40.96 billion to $44.51 billion. This monthly level was the highest since last August’s $44.64 billion.
>Contrasting with the trade flow story in recent years, the increase stemmed largely from a stunning 84.19 percent surge in the current dollar oil trade deficit, from $2.89 billion to $5.32 billion. This increase was the greatest in percentage terms since these data began being tracked in 1992, though in absolute terms, the oil deficit remained at levels last seen in the mid-1990s.
>The inflation-adjusted oil deficit rose impressively in June, too – by 34.65 percent. The $9.66 billion total was the biggest since March, 2015 ($10.28 billion).
>Manufacturing’s chronic and huge trade gap rose by only 1.44 percent on month in June, but at $74.05 billion, it represented the second largest total on record (after last September, 2015’s $74.69 billion.
>June manufacturing exports increased by 2.74 percent sequentially, from $88.74 billion to $91.17 billion. Manufacturing imports were up a slower 2.15 percent, but the volumes were much greater – as they increased from $161.74 billion to $165.22 billion.
>So far this year, the manufacturing trade deficit is running 2.65 percent ahead of last year’s record $830 billion total.
>Year-on-year, manufacturing exports are down 7.35 percent, but imports are only 3.22 percent lower.
>The June trade figures also revealed that the growth of the Made in Washington portion of the trade deficit – the non-oil goods gap adjusted for inflation – remained a major growth drag during the current historically feeble economic recovery. Since the expansion began, in the second quarter of 2009, the increase in this trade deficit has cut inflation-adjusted growth by a cumulative 19.70 percent, or $437.19 billion — largely because of a June deficit that, at $60.93 billion was the second biggest after inflation figure since these records began to be kept in 1994. .
>Combined U.S. exports inched up 0.33 percent sequentially in June, from an upwardly adjusted $182.54 billion to $183.15 billion – their highest level since last November’s $183.58 billion.
>Total goods and service imports rose nearly five times faster – by 1.86 percent, from $223.50 billion in May to $227.66 billion. That’s the highest level since September.
>The combined January-June, 2016 trade deficit of $244.72 billion is 2.32 percent smaller last year’s $250.54 billion.
>Overall exports are off by 4.73 percent year-to-date, and imports are 4.30 percent lower.
>America’s big, longstanding merchandise trade deficit with China rose 2.55 percent on month in June, as exports and imports both increased. So far this year, the China merchandise deficit is running 6.45 percent below last year’s record total.
>The goods deficit with new free trade partner South Korea remained virtually unchanged, but at a monthly level some five times greater than when that agreement went into effect in March, 2012.
>The goods deficit with Japan, another difficult trade partner and signatory to President Obama’s Trans-Pacific Partnership, soared by nearly 26 percent in June, mainly on an 11.70 percent rise in imports. This bilateral deficit is down 3.73 percent year-to-date.
>America’s volatile trade deficit in high tech goods increased 9.65 percent on month in June, from $6.73 billion to $7.38 billion – its highest level since December. Both exports and imports were up.