U.S. Trade Deficit Deepens in December

The U.S. foreign trade deficit in goods and services (BOP basis) increased to $67.4 billion during December from $61.0 billion in November, revised from $61.5 billion. The deficit remained below the $106.4 billion record in March. A $68.5 billion deficit had been expected in the Action Economics Forecast Survey. Exports declined 0.9% (+7.6% y/y) in December after falling 1.6% in November. It was the fourth consecutive month of decline. Imports rose 1.3% (2.0% y/y) after declining 6.1% in November. Imports have fallen 9.3% during the last nine months.

The goods trade deficit (customs value) widened to $89.7 billion in December from $82.1 billion in November. The latest figure compared to the advance estimate of a $90.3 billion deficit issued late last month. Off for the fourth consecutive month, exports of goods fell 1.7% (+5.2% y/y) after a 2.4% decline in November. Exports of nonauto consumer goods fell 4.9% (-8.9% y/y) while industrial supplies exports declined 4.7% (+6.9% y/y). To the upside, foods, feeds & beverage exports gained 4.9% (-1.0% y/y) while auto & auto parts exports rose 3.7% (13.6% y/y). Capital goods exports edged 0.3% higher (7.2% y/y).

Imports of goods (customs value) rose 1.9% (-0.6% y/y) following a 7.4% November decline. Auto imports increased 9.0% (16.0% y/y) while nonauto consumer goods imports rose 6.9% (-11.9% y/y). Foods, feeds & beverage imports improved 0.3% (5.6% y/y). Working lower, industrial supplies & materials imports fell 4.1% (-2.5% y/y) and capital goods imports excluding autos eased slightly (+6.0% y/y). Total nonpetroleum goods imports increased 2.4% (18.5% y/y), while petroleum imports declined 9.9% (-9.4% y/y).

The services trade surplus increased to $23.2 in December from $22.2 billion in November. Total services exports rose 0.9% (12.2% y/y). Travel exports increased 3.3% (46.1% y/y) while charges for the use of intellectual property improved 0.4% (-3.1% y/y). Financial services exports gained 0.3% (-2.7% y/y). Imports of services eased 0.5% (14.4% y/y) in December. Travel imports fell 4.2% (+64.2% y/y) while charges for the use of intellectual property gained 4.0% (29.2% y/y). Financial services imports eased 0.1% (+5.8% y/y).

The real (inflation-adjusted) goods trade deficit widened to $98.6 billion (chained 2012 dollars) in December from $96.1 billion November. It remained narrower than the $135.2 billion deficit in March. Exports rose 1.6% (1.8% y/y) while imports increased 2.0% (-3.1% y/y).

The goods trade deficit with China widened to a seasonally adjusted $22.8 billion in December from $19.8 billion in November. It has roughly halved during the last nine months. Exports rose 6.9% y/y while imports declined 26.0% y/y. The trade deficit with Japan widened to $7.2 billion in December from $5.6 billion as exports rose 0.3% y/y and imports surged 19.2% y/y. The goods trade deficit with the European Union eased to $18.6 billion from $19.5 billion in November. Exports rose 24.7% y/y while imports increased 17.6% y/y. These figures date back to January 2009.

The international trade data, including relevant data on oil prices, can be found in Haver's USECON database. Detailed figures on international trade are available in the USINT database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.

Financial Market Conditions during Monetary Tightening from the Federal Reserve Bank of San Francisco is available here.