U.S. Trade Deficit Narrows as Exports & Imports Both Fall

The U.S. foreign trade deficit decreased to $40.4 billion in March from $47.0 billion in February, marginally revised from $47.1 billion. A deficit of $41.5 billion was expected in the Action Economics Forecast Survey. Exports of goods & services fell 0.9% (-5.4% y/y) as imports dropped 3.6% (-9.1% y/y).

The trade deficit in goods was $58.5 billion in March, following February's $64.5 billion. Goods exports decreased 1.6% (-8.1% y/y). Four of the five major categories fell, with nonauto consumer goods exports down 9.3% (-4.1% y/y). Autos & parts were down 5.6% (-3.3% y/y), foods, feeds & beverages 3.7% (-15.0% y/y) and industrial materials & supplies 2.5% (-15.7% y/y). Capital goods exports rose 2.4% (-3.7% y/y) and "other" goods were up 15.0% (8.4% y/y).

Imports of goods were also down in March, by 4.3% (-11.2% y/y). Every major end-use category declined, with non-auto consumer goods down 9.9% (-13.8% y/y), food, feed & beverages down 5.9% (3.7% y/y) and capital goods down 3.2% (-9.1% y/y). Imports of industrial materials & supplies were off 2.9% in March (-22.8% y/y) and autos & parts 2.6% (-3.3% y/y). "Other" goods imports did increase, by 16.4% in the month (13.8% y/y).

The dollar value of energy-related imports rose in March by 11.2% (-38.1% y/y) after a sizable decrease in February. Quantity, measured in thousands of barrels, increased 9.4% (+4.9% y/y). The dollar value of crude petroleum imports rebounded 13.7%% (-36.2% y/y) as the per barrel cost of crude edged up to $27.68 (-40.4% y/y).

The surplus in services trade widened slightly to $18.1 billion in March from $17.6 billion the month before. Exports of services were up 0.5%% (0.4% y/y) with transport up 2.1% (-3.4% y/y) and travel up 1.2% (5.6% y/y). Financial services exports fell 0.8% (-6.2% y/y). Imports of services decreased 0.5% (2.9% y/y), with transport down 5.0% (-9.9% y/y) and financial services off 0.7% (4.6% y/y). Travel imports increased 1.4% (11.5% y/y).

By country, the trade deficit in goods with China dropped noticeably to $20.9 billion from $28.1 billion in February. Exports to China fell 9.5% from a year ago, and imports were off sharply y/y, by 27.4%. The trade deficit with Japan was $6.7 billion from $5.3 billion; exports were down 5.9% from a year ago, and imports also fell, by 5.8%. The deficit in goods trade with the European Union widened to $13.1 billion. Exports to the EU increased 1.7% from a year ago, and imports increased 2.2% 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.