Thursday, April 02, 2015

Trade Deficit decreased in February to $35.4 Billion

by Bill McBride on 4/02/2015 08:54:00 AM

The Department of Commerce reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $35.4 billion in February, down $7.2 billion from $42.7 billion in January, revised. February exports were $186.2 billion, $3.0 billion less than January exports. February imports were $221.7 billion, $10.2 billion less than January imports.
The trade deficit smaller than the consensus forecast of $41.5 billion.

The first graph shows the monthly U.S. exports and imports in dollars through February 2015.

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

Imports and exports decreased in February (probably due to impact of West Coast port slowdown).

Exports are 12% above the pre-recession peak and down 1% compared to February 2014; imports are 4% below the pre-recession peak, and down 4% compared to February 2014. 

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

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 imports averaged $49.53 in February, down from $58.96 in January, and down from $91.53 in February 2014.  The petroleum deficit has generally been declining and is the major reason the overall deficit has declined since early 2012.

Oil prices will probably increase a little in the March report.  Note: There is a lag due to shipping and long term contracts.

The trade deficit with China increased to $22.5 billion in February, from $20.8 billion in February 2014.  The deficit with China is a large portion of the overall deficit.

The decrease in the trade deficit was due to a lower volume and lower price of oil imports, and the West Coast port slowdown.  Oil prices will probably be a little higher in March, and trade will be up sharply at the West Coast ports.