Thursday, November 13, 2008

Trade Deficit Declines to $56.5 Billion in September

by Calculated Risk on 11/13/2008 09:03:00 AM

A few points from the trade report:

  • Both imports and exports are declining.

  • The oil trade deficit is falling sharply, and will fall much further. The petroleum deficit was just over $32 billion in September, and that was based on average oil prices of $107.58 per barrel for the month. With oil now trading in the $50s, the petroleum deficit will decline sharply in coming months.

  • The trade deficit with China was a record $27.8 billion.

    The Census Bureau reports:
    [T]otal September exports of $155.4 billion and imports of $211.9 billion resulted in a goods and services deficit of $56.5 billion, down from $59.1 billion in August, revised. September exports were $9.9 billion less than August exports of $165.3 billion. September imports were $12.5 billion less than August imports of $224.4 billion.
    U.S. Trade Deficit Click on table for larger image in new window.

    This graph from the Census Bureau shows that both imports and exports are declining.

    Although the trade deficit is declining - and will decline more in coming months because of the decline in oil prices - growth in export related business will probably no longer be a positive for the U.S. economy as the global economy slides into recession too.

    U.S. Trade Deficit This graph shows the U.S. trade deficit through September. 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. The current recession is marked on the graph.

    The oil deficits is starting to decline and will decline much further in October and November. Note that the trade deficit ex-petroleum is really a China problem now (the trade deficit with China was a record $27.8 billion in September).