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Economy in Brief

U.S. Trade Deficit Deepens as Exports Ease and Imports Jump
by Tom Moeller  July 6, 2016

The U.S. trade deficit in goods and services widened to $41.1 billion in May from an unrevised $37.4 billion in April. The Action Economics Forecast Survey had expected a $40.0 billion deficit. The latest figure was the deepest in three months and occurred as exports eased 0.2% (-4.2% y/y) following a 1.4% rise, and imports increased 1.6% (-3.1% y/y) after a 2.0% jump.

The decline in exports reflected a 0.3% dip (-6.2% y/y) in goods exports. It was led by a 2.7% drop (-1.0% y/y) in auto & parts exports and a 1.9% decline (-4.5% y/y) in capital goods exports. Nonauto consumer goods exports followed with a 1.7% shortfall (-2.6% y/y). Exports of industrial supplies & materials improved 0.1% (-13.4% y/y) and foods, feeds & beverage exports gained 5.5% (-6.8% y/y). Exports of services eased 0.1% (-0.3% y/y) led by a 1.1% decline (+1.7% y/y) in travel exports and a 0.4% drop (-4.8% y/y) in charges for the use of intellectual property.

Imports of goods increased 1.9% (-4.1% y/y) as industrial supplies & materials imports surged 6.9% (-12.0% y/y). The value of energy-related petroleum product imports led the increase and jumped 11.2% (-28.3% y/y) as the per barrel cost of crude oil surged to $34.2. The quantity of energy-related product imports declined, however, by 2.5% (+7.4% y/y). Nonauto consumer goods imports jumped 2.7% (-2.0% y/y) while auto imports gained 0.9% (-1.1% y/y). Imports of foods, feed & beverages rose 0.7% (2.8% y/y, but capital goods imports declined 1.7% (-3.8% y/y). Services imports were unchanged ( 2.1% y/y). Travel imports also were unchanged (8.4% y/y) and charges for the use of intellectual property eased 0.3% (+0.3% y/y).

By country, the trade deficit with mainland China deepened to $29.0 billion. Exports declined 1.7% (-2.8% y/y) while imports rose 13.8% (-3.9% y/y). Exports to Japan increased 11.5% (-3.7% y/y) but imports declined 9.3% (-7.2% y/y). The trade deficit with the European Union increased to $13.4 billion. Exports fell 4.2% (-5.0% y/y) and imports gained 1.6% (-2.0% y/y).

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA.

The minutes to the latest FOMC meeting can be found here.

Foreign Trade in Goods & Services (Current Dollars) May Apr Mar Y/Y 2015 2014 2013
U.S. Trade Deficit $41.1 bil. $37.4 bil. $35.5 bil. $40.2 bil.
(5/15)
$500.4 bil. $490.2 bil. $461.9 bil.
Exports of Goods & Services (% Chg) -0.2 1.4 -1.1 -4.2 -4.9 3.6 3.4
Imports of Goods & Services (% Chg) 1.6 2.0 -4.6 -3.1 -3.7 4.0 0.0
  Petroleum (% Chg) 8.4 5.0 -3.9 -28.7 -45.5 -9.6 -11.0
  Nonpetroleum (% Chg) 1.5 2.2 -5.7 -1.9 2.2 6.5 2.0
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