Thursday, November 10, 2011

Trade Deficit declines in September as Exports increase

by Bill McBride on 11/10/2011 09:15:00 AM

The Department of Commerce reports:

[T]otal September exports of $180.4 billion and imports of $223.5 billion resulted in a goods and services deficit of $43.1 billion, down from $44.9 billion in August, revised. September exports were $2.5 billion more than August exports of $177.9 billion. September imports were $0.7 billion more than August imports of $222.8 billion.
The trade deficit was below the consensus forecast of $46.3 billion and the deficit for August was revised down.

The first graph shows the monthly U.S. exports and imports in dollars through September 2011.

U.S. Trade Exports Imports Click on graph for larger image.

Exports increased in September, and imports have been mostly moving sideways for the last five months (seasonally adjusted). Exports are well above the pre-recession peak and up 16% compared to September 2010; imports have stalled recently and are up about 12% compared to September 2010.

The second graph shows the U.S. trade deficit, with and without petroleum, through September.

U.S. Trade Deficit The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil averaged $101.02 per barrel in September, and import oil prices have been declining slowly from $108.70 per barrel in May. The trade deficit with China declined slightly to $28 billion.

Imports have been moving sideways for the last several months - partially due to slightly lower oil prices. However the trade deficit with China continues to be a significant issue. Exports are still trending up.