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Economy in Brief

U.S. Trade Deficit Narrows with Higher Exports and Slightly Lower Imports
by Carol Stone, CBE  July 6, 2017

The U.S. trade deficit in goods and services narrowed to $46.5 billion in May from April's $47.6 billion, which was only minimally revised, contrasting with $41.5 billion in May 2016. Expectations in the Action Economics Forecast Survey were very close, with a $46.3 billion deficit. Total exports rose 0.4% (+5.4% y/y) after a 0.1% downtick. Imports eased 0.1% (+6.6% y/y) in May after their 0.9% advance in April.

Exports of goods rose 0.1% in May (+6.1% y/y), after falling 0.3% in April. The gain came in autos, up 4.9% (4.2% y/y), and nonauto consumer goods, 5.6% (6.4% y/y). Those had both decreased in April. May data showed declines in food, feed & beverages, -6.0% (+11.0% y/y), "other" goods, -2.2% (-3.5% y/y), capital goods, -1.0% (+0.2% y/y) and industrial materials & supplies, -0.3% (+14.5% y/y).

Services exports rose 1.0% (+3.9% y/y). For categories ranked by dollar amount, travel by foreign tourists in the U.S., $18.1 billion in May, increased 1.6% (+6.3% y/y) and revenue from business services, $11.9 billion, increased 0.1% (+1.4% y/y), while charges for the use of intellectual property, $10.2 billion, eased 0.1% (-2.5% y/y).

On the import side, purchases of goods decreased 0.3% in May (+9.5% y/y). The decline came in nonpetroleum goods, which, with a 0.6% fall (+4.9% y/y), reversed part of their April 2.3% increase. Petroleum imports, by contrast, rose 2.4% (40.6% y/y), thus reversing part of their 12.0% drop in April. The price of crude petroleum averaged $45.03/barrel in May, down from $45.40 in April but up from $34.19 in May 2016. The quantity of energy-related petroleum product imports was 15.0% higher in May from a year ago.

Among nonpetroleum goods imports, nonauto consumer goods also reversed their April move as they fell 2.9% (+2.9% y/y), and autos fell 2.4%% (+0.7% y/y). Foods, feeds & beverages were down 0.6% (+6.0% y/y). Other end-use categories had increases: "other" goods imports rose 2.9% (+7.9% y/y), capital goods 2.4% (+8.4% y/y) and industrial materials & supplies 0.2% (16.3% y/y).

Services imports were up 0.9% (+5.4% y/y) in May. Travel, also the largest category of service imports at $11.1 billion, was up 2.2% (+9.0% y/y). Transport service imports, $8.4 billion, rose 0.9% (+3.9% y/y) and business services imports, $8.1 billion, edged lower by 0.2% (-3.2% y/y).

By country, the trade deficit with China deepened yet again to $31.6 billion from $29.0 billion in May 2016. Exports to China rose 19.4% y/y while imports rose 11.4% y/y. The trade deficit with the European Union was $12.8 billion in May versus $13.5 billion one year earlier. Exports to the EU rose 7.6% y/y while imports were up 2.7% y/y. The trade deficit with Japan widened to $5.8 billion from $4.7 billion twelve months earlier. Exports to Japan eased 1.1% y/y and imports were up 11.0% y/y. These country data are not seasonally adjusted.

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.

Foreign Trade in Goods & Services (Current Dollars) May Apr Mar Y/Y 2016 2015 2014
U.S. Trade Deficit $46.5 bil. $47.6 bil. $45.3 bil. $41.5 bil.
(5/16)
$504.8 bil. $500.4 bil. $490.3 bil.
Exports of Goods & Services (% Chg) 0.4 -0.1 -0.1 5.4 -2.5 -4.7 3.6
Imports of Goods & Services (% Chg) -0.1 0.9 0.1 6.6 -1.9 -3.6 4.0
  Petroleum (% Chg) 2.4 -12.0 -4.2 40.6 -19.4 -45.5 -9.7
  Nonpetroleum Goods (% Chg) -0.6 2.3 0.5 4.9 -1.2 2.2 6.5
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