(What’s Left of) Our Economy: New Oil and High Tech Records Help Narrow the March U.S. Trade Deficit

Tags

China, exports, high tech goods, imports, manufacturing, non-oil goods deficit, oil, petroleum, recovery, Trade, Trade Deficits, {What's Left of) Our Economy

The March U.S. total trade deficit of $40.44 billion was the lowest in more than a year, and reflected record low petroleum shortfalls in both current and constant dollar terms, and the best month in history for high tech goods exports. Real petroleum exports rose to historic levels as well. The huge American merchandise trade deficit with China fell by the greatest amount since February, 2012 and a 4.43 percent narrowing of the manufacturing deficit was led by a double-digits percent monthly rise in exports.

All the same, the growth of that slice of the trade deficit most strongly affected by trade policy resulted in a 20-plus percent subtraction from the current weak U.S. economic expansion – which translates into $430 billion of lost growth.

Here are selected highlights of the latest monthly (March) trade balance figures released this morning by the Census Bureau:

>A slowing U.S. economy, along with more new records in oil trade and high tech goods trade, finally significantly narrowed America’s trade deficit in March.

>The combined goods and services shortfall of $40.44 billion was the lowest monthly total since February, 2015, and represented a 13.88 percent plunge from last month’s downwardly revised $46.96 billion.

>March’s trade deficit improvement was led by a 3.58 percent monthly drop in overall imports, from a downwardly revised $225.13 billion to $217.061 billion. This 3.58 percent decrease – the biggest such decline since recessionary February 2009’s 4.92 percent – brought America’s overall foreign purchases to their lowest monthly level since February, 2011.

>In turn, these subdued import totals were keyed by new record improvements in U.S. oil trade. The chronic U.S. oil trade deficit sank by 16.04 percent from February’s $3.53 billion to $2.97 billion – an all-time low (based on Census data that go back to 1992).

>U.S. oil imports of $9.44 billion in March were down by 4.52 percent from February’s $9.86 billion, and reached their lowest level since September, 2002 ($9.02 billion).

>March also saw a monthly rise in U.S. oil exports – of 2.36 percent, from $6.32 billion to $6.47 billion. But these levels are well off records.

>America’s oil trade also dramatically improved in inflation-adjusted terms in March. The real oil trade deficit shrank by 8.78 percent on month from $8.83 billion to $8.05 billion – a new all-time low (also based on Census figures dating to 1992). The previous record low was $8.14 billion, set in August, 2014.

>Yet many of these gains stemmed from the second straight month of record constant-dollar oil exports. These shipments hit $9.19 billion in March – 1.77 percent higher than February’s total of $9.03 billion.

>The above developments pushed the year-on-year combined U.S. trade deficit 0.78 percent lower (to $133.29 billion) than 2015’s comparable total ($134.33 billion).

>Goods and services exports fell 0.88 percent in March, from an upwardly revised $178.16 billion to $176.62 billion. This total represents the second worst since June, 2011 ($175.61 billion). Only January’s $176.92 billion was lower.

>Combined exports are now down 5.44 percent year-on-year.

>Combined imports are now down 4.54 percent year-on-year.

>Oil trade trends also significantly influenced America’s merchandise trade. The March goods trade deficit of $58.51 billion was 9.33 percent lower than February’s downwardly revised $64.53 billion. It also represented the smallest goods trade gap since the previous February.

>Goods exports dropped by 1.56 percent in March, from February’s upwardly adjusted $118.67 billion to $116.82 billion.

>This total was the nation’s second lowest since November, 2010 ($114.63 billion). The lowest was January’s $116.77 billion.

>The goods trade deficit is now down 2.77 percent year on year, with exports down 8.65 percent and 6.23 percent.

>The March figures also revealed that, year on year, the U.S. oil trade deficit is down 57.15 percent – from $25.95 billion for the first three months of 2015 to $11.12 billion during the first quarter of this year.

>In inflation-adjusted terms, the oil trade deficit is down 1.63 percent year on year – from $17.23 billion to $16.95 billion.

>Another record set in March was for high tech goods exports – $31.52 billion. (Figures go back to 1989.) That represented a 23.28 percent increase over the February figure.

>Largely as a result, the chronic but volatile U.S. trade deficit in this category fell by 35.06 percent on month, from $5.14 billion to $3.34 billion – the lowest total since last February ($3.13 billion).

>High tech goods imports increased robustly as well – by 13.51 percent, from $30.71 billion to $34.86 billion.

>March was a good month for U.S. services trade, too. The surplus rose 2.85 percent, to $18.07 billion, from February’s downwardly revised $17.57 billion. March’s surplus was the biggest since last June.

>Services exports ticked up by 0.51 percent, from February’s upwardly adjusted $59.49 billion to $59.80 billion. Imports dipped 0.47 percent, from an upwardly adjusted $41.92 billion to $41.73 billion.

>March services exports and imports both represented the third highest monthly totals on record.

>Year on year, however, the services surplus is down 7.41 percent, as exports have fallen fractionally and imports have risen 3.49 percent.

>The March contraction in America’s overall trade deficit and its goods trade deficit was also attributable to the biggest drop in the monthly goods trade shortfall with China in more than four years.

>This chronic bilateral merchandise deficit plummeted from $28.11 billion in February to $20.90 billion. That’s the smallest such figure since February, 2014’s $20.85 billion.

>Moreover, the 25.65 percent sequential decrease was the largest since February, 2012’s 25.86 percent.

>U.S. goods exports to China jumped by 11.23 percent in March – to $8.95 billion from $8.05 billion in March.

>American merchandise imports from China cratered by 17.44 percent in March – from $36.16 billion in February to $29.85 billion.

>The huge and chronic U.S. manufacturing trade deficit decreased by 4.43 percent in March, from $65.89 billion to $62.97 billion. Notably, both imports and exports surged.

>Manufacturing sales abroad rose by 12.38 percent, from $82.53 billion to $92.74 billion. The much larger volume of imports, however, increased by a strong 4.91 percent as well, from $148.41 billion to $155.70 billion.

>Year on year, the manufacturing trade deficit has increased by 3.86 percent through March – from $187.08 billion to $194.30 billion. This growth rate is considerably slower than that of recent years.

>Manufacturing exports year on year are down by 7.11 percent so far, from $273.96 billion to $254.49 billion. The much greater amount of manufacturing imports has fallen so far by only 2.66 percent – from $461.03 billion to $448.78 billion.

>Despite the relatively good March totals generally, a high figure for the inflation-adjusted non-oil goods deficit pushed the trade drag on cumulative recovery-era growth still higher.

>Incorporating the category’s $54.84 billion March trade gap, the expansion of the non-oil trade deficit has now reduced recovery era real growth of $2.1371 trillion (since the second quarter of 2009), by $430.18 billion – or 20.13 percent.

>Since non-oil trade flows are those that are most significantly affected by trade agreements and related policies, this trade deficit’s growth-killing impact considerably weakens the case for Congress ratifying President Obama’s Trans-Pacific Partnership trade deal.

(What’s Left of) Our Economy: November U.S. Trade Deficit Dips but Longer-Term Trends Remain Worrisome

Tags

Canada, China, exports, growth, high tech goods trade, imports, Jobs, Korea, KORUS, manufacturing, manufacturing trade deficit, Obama, petroleum, TPP, Trade, trade deficit, Trans-Pacific Partnership, {What's Left of) Our Economy

The U.S. goods and services trade deficit fell by 4.95 percent in November to the second lowest monthly total of the year but the drop’s magnitude was boosted by a significant upward revision for October’s total – the second big monthly upgrade in a row.

Overall exports, goods exports, and goods imports sunk to their worst monthly levels in nearly four and five years, respectively, and the huge chronic shortfalls in manufacturing and China merchandise trade retreated sequentially. Yet both are still on track for new annual records, and monthly high tech goods trade registered its third highest deficit ever. Goods imports from Canada are now at five-plus-year bottom. And even though petroleum imports and the oil trade shortfall increased on month, both remained near lows set in 2003 and 1999, respectively.

Here are selected highlights of the latest monthly (November) trade balance figures released this morning by the Census Bureau:

>The combined U.S. goods and services trade deficit decreased by 4.95 percent on month in November, to $42.37 billion – the second lowest total of the year after February’s weather- and ports-strike-affected $38.54 billion.

>But the improvement was magnified by a 1.57 percent upward revision in the October overall deficit – from $43.89 billion to $44.58 billion. This revision represented the second significant monthly upgrade in a row.

>U.S. combined exports and imports declined sequentially. The former fell from a downwardly revised $183.78 billion to $182.21 billion, and the latter from an upwardly revised $228.36 billion to $224.59 billion.

>In historic perspective, however, the export fall-off was more significant. Combined goods and services exports in November hit their lowest level since January, 2012, and goods exports have not been this weak since February, 2011.

>November’s overall import total was the lowest since that winter- and labor-affected February’s $224.43 billion. The merchandise import level of $183.48 billion, however, was the weakest since February, 2011’s $176.72 billion.

>America’s huge and longstanding shortfalls in manufacturing and China trade both were down sequentially in November, but both also still seem certain to hit new annual records.

>The manufacturing trade deficit fell to $71.13 billion from October’s all-time high $76.74 billion. Yet despite this 7.31 percent decrease, this trade gap is running 13.89 percent ahead of last year’s record pace.

>From October to November, manufactures exports sank by 7.43 percent, to $88.02 billion, while the much larger amount of imports dropped by 7.38 percent, to $159.15 billion.

>Through November, U.S. manufactures exports are down 6.39 percent year-on-year, while imports are up 1.30 percent.

>The manufacturing-dominated goods trade deficit with China declined 5.19 percent on month in November, from $32.97 billion to $31.26 billion. U.S. merchandise exports to the still strongly growing PRC economy were down 6.18 percent, from $11.38 billion to $10.68 billion. America’s merchandise imports from China on month were off 5.45 percent, from $44.36 billion to $41.94 billion.

>Nonetheless, the bilateral trade imbalance through November is running 7.23 percent ahead of last year’s all-time high. And America’s merchandise exports to China this year could fall on an annual basis for the first time since 2009.

>In another noteworthy development, the high tech goods trade deficit in November rebounded to 2015 high of $11.44 billion – up 9.79 percent from October’s $10.42 billion figure. This total also represented the third worst monthly high tech goods deficit ever, and could propel this imbalance to its second highest annual level on record.

>High tech goods exports decreased by 9.40 percent on month, to $28.10 billion, while imports fell by only 4.57 percent, to $39.53 billion.

>Another multi-year low revealed in the November trade figures came in U.S. goods imports from Canada. The $22.73 billion figure hasn’t been this weak since July, 2010.

>The new report also cast further doubt on President Obama’s trade strategy, as the goods deficit with Korea worsened by 4.84 percent. Washington and Seoul signed a free trade agreement in 2012, and this KORUS deal was the model for the much larger Trans-Pacific Partnership (TPP) completed last year.  But the trade gap with Korea this year is currently 14.50 percent greater than year’s January-November total and looks certain to set its third annual record since the bilateral pact was concluded.

>On a monthly basis, the U.S. merchandise trade deficit with Korea has more than quadrupled since the agreement went into effect in March, 2012.

>The improvement in the overall November U.S. trade balance contrasted with a 19.58 percent sequential increase in the petroleum trade gap – from $4.48 billion to $5.36 billion. Nonetheless, that figure still represents the second lowest monthly total since June, 1999.

>Similarly, although petroleum imports increased by 5.12 percent sequentially, to $12.62 billion, that total was the second lowest since December, 2003.

>Also, despite the monthly shrinkage, the U.S. combined goods and services trade deficit is 5.45 percent higher on a January-November basis than the 2014 figure.

(What’s Left of) Our Economy: October Trade Deficit Rebounds; Slumping Manufacturing Sets Another New Monthly Trade Gap Record

Tags

China, manufacturing, manufacturing trade deficit, petroleum, recovery, Trade, trade deficit, {What's Left of) Our Economy

The U.S. goods and services trade deficit rose by 3.38 percent in October and the increase would have been much greater had the September total not be revised up by a substantial four-plus percent. Total exports fell to their lowest level since October, 2012 and the manufacturing trade deficit set its third new new monthly record in four months and remains on track to hit another new annual record.

In current dollar terms, the petroleum trade deficit shrunk to its smallest level since April, 1999 and pre-inflation oil imports were the least since November, 2003. Adjusting for inflation, the petroleum trade deficit represented a post-August, 2014 low, and real oil imports stood at their low point since March, 1996. The China merchandise trade deficit fell sequentially, but is running more than seven percent ahead of last year’s record pace. And the policy-influenced trade deficit has now slowed the current recovery by nearly 20 percent in real terms – or more than $400 billion.

Here are selected highlights of the latest monthly (October) trade balance figures released this morning by the Census Bureau:

>The combined U.S. goods and services trade deficit rebounded by 3.38 percent in October on month, to $43.89 billion, and the percentage gain would have been greater if not for an unusually large (4.03 percent) upward revision in the September figure – from $40.81 billion to $42.46 billion.

>The increase was keyed to a 1.45 percent monthly drop in total exports – from a downwardly adjusted $186.77 billion to $184.06 billion – that brought their level to the lowest since October, 2012.

>Goods and services imports fell sequentially in October, too, and reached their lowest level since June, 2013. But the decrease – from an upwardly revised $229.22 billion to $227.95 billion – was much smaller proportionately (0.55 percent) than the export decline.

>The nation’s huge and chronic manufacturing trade deficit hit its second straight monthly record in November, and third in the last four months. The $76.74 billion figure topped September’s previous all-time high by 2.75 percent.

>Manufactures exports in October rose month-to-month by 2.43 percent – from $92.83 billion to $95.08 billion. But manufacturers imports were up by 2.57 percent – from $167.52 billion to $171.82 billion.

>The October figures brought manufacturing’s year-to-date trade deficit to $691.09 billion. That’s 14.06 percent greater than last year’s comparable total – which wound up setting a new record.

>Manufactures exports for the first ten months of this year are running 6.10 percent behind last year’s levels, while imports are 1.52 percent greater.

>The October trade figures also revealed several multi-year lows for America’s petroleum trade. The pre-inflation petroleum trade deficit fell plunged on month by 19.64 percent, with the $4.47 billion figure representing the lowest since April, 1999. Current dollar oil imports sank by 13.16 percent from September to October, to a $12.01 billion total that’s the lowest since November, 2003.

>Adjusting for inflation, the October petroleum trade deficit was down by 7.84 percent on month. The $8.26 billion total is the smallest since August, 2014. But October’s $16.18 billion in real oil imports are the lowest monthly total since March, 1996 – and marked an 8.65 percent decrease since September.

>America’s China merchandise trade enjoyed a relatively good month in October, with the deficit down from September’s record $36.28 billion to $32.97 billion. At the same time, that total was the year’s third biggest.

>Although China’s economic growth is slowing, U.S. goods exports to the PRC jumped 20.80 percent in October sequentially to $11.38 billion – the year’s highest total. U.S. goods imports fell by 9.11 percent, to $32.97 billion.

>Nonetheless, the U.S.-China merchandise trade deficit this year so far is running 7.62 percent ahead of last year’s record total.

>U.S. goods exports to China this year are running 4.04 percent behind last year’s totals, and imports are running 4.62 percent ahead.

>The October figures again showed that the nation’s trade performance – and especially the trade flows heavily influenced by trade agreements and similar policy decisions – have drained major amounts of valuable growth from America’s already sluggish economic recovery.

>The inflation-adjusted goods deficit for the third quarter of 2015 – which strips out trade in oil and services that are not significantly affected by trade policies – has now come in at a record $166.88 billion on an annualized basis. As a result, its increase – from $65.95 billion in the second quarter of 2009, when the last recession ended – has slowed the economy’s cumulative growth by $403.21 billion, or 19.58 percent. Worse, virtually all of this lost growth has come in the private sector.

>The October trade figures brought the combined pre-inflation U.S. global trade deficit to $444.95 billion this year – 5.25 percent greater than the $380.00 billion for the first ten months of 2014.

>U.S. exports year-to-date are down 4.34 percent, but the much greater amount of imports is down only 2.63 percent.