U.S. Trade Deficit Widens to a Nine-Month-High $67.43 Billion in January

The U.S. trade deficit in goods and services (BOP basis) rose to $67.43 billion in January from $64.17 billion in December ($62.20 billion originally), according to the U.S. Census Bureau. This was the fourth month in five in which the deficit had widened. The January deficit was the biggest since April 2023 but smaller than the $70.30 billion in January 2023. A $63.2 billion deficit had been expected in the Action Economics Forecast Survey. Exports edged up 0.1% m/m (-0.4% y/y) in January following a 1.1% rise in December (+1.5% originally) and two successive m/m declines. Imports rose 1.1% (-1.2% y/y) after a 1.4% December rebound (+1.3% previously).

The deficit in goods trade (BOP basis) rose to $91.60 billion in January, the largest since April 2023, from $88.65 billion in December; it was larger than the $90.17 billion in January 2023. Goods exports ticked up 0.1% (-3.4% y/y) in January after a 1.4% rebound in December. Imports of goods rose 1.2% (-1.7% y/y), up for the fourth month in five, after a 1.5% December gain. The services trade surplus slipped to a three-month-low $24.17 billion in January from $24.48 billion in December, but it was up from $19.88 billion in January 2023. Services exports rose 0.2% (6.2% y/y) in January, the fifth m/m rise in six months, on top of a 0.6% gain in December. Services imports increased 0.8% (1.2% y/y) following a 1.0% December rise and two straight m/m drops.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars) widened to $86.00 billion in January, the largest since October, from $83.46 billion in December; it was larger than the $85.07 billion in January 2023. Real exports of goods fell 0.2% (-1.0% y/y) in January, the third m/m fall in four months, following a 2.7% rise in December. Real imports of goods grew 1.0% (-0.2% y/y), the fourth m/m gain in five months, after a 1.8% December rebound. A widening trade balance (net exports) had added 0.32%-points to GDP growth in Q4 2023 after adding 0.03%-points in Q3 2023.

The customs value goods trade deficit widened to $90.51 billion in January, the biggest since May 2023, from $87.76 billion in December; it was larger than the $89.89 billion in January 2023. The latest figure was slightly larger than a $90.20 billion deficit in the advance report released on February 28. Custom value exports inched up 0.1% (-3.0% y/y) in January after a 2.0% rebound in December, reflecting m/m gains of 10.2% (-2.8% y/y) automotive vehicles, parts & engines, 3.0% (-8.2% y/y) in nonfood consumer goods excluding autos, and 1.1% (3.4% y/y) in capital goods excluding autos. To the downside, exports for other goods (-5.9%; +3.0% y/y), industrial supplies & materials (-2.6%; -5.5% y/y), and foods, feeds & beverages (-1.7%; -8.3% y/y) dropped m/m in January.

Customs value imports grew 1.2% (-1.7% y/y) in January, the fourth m/m increase in five months, following a 1.5% gain in December, reflecting m/m rises of 5.0% (7.9% y/y) in automotive vehicles, parts & engines, 4.3% (3.5% y/y) in capital goods excluding autos, 2.4% (2.3% y/y) in other goods, and 0.6% (-2.3% y/y) in foods, feeds & beverages. In contrast, goods imports for industrial supplies & materials (-2.3%; -8.9% y/y) and nonfood consumer goods excluding autos (-1.8%; -7.0% y/y) fell m/m in January. Meanwhile, petroleum imports fell 11.3% (-10.9% y/y) in January, the first m/m fall since October, following a 0.5% rise in December. Nonpetroleum imports grew 2.3% (-0.9% y/y), the fourth m/m advance in five months, after a 1.5% December increase.

The 0.2% January rise (6.2% y/y) in services exports reflected increases of 2.3% (12.6% y/y) in personal, cultural & recreational services, 0.9% (3.5% y/y) in financial services, and 0.5% (23.3% y/y) in travel services, while exports for construction services (-4.7%; -17.2% y/y), government goods & services (-2.1%; -18.4% y/y), and maintenance & repair services (-1.5%; +8.3% y/y) declined m/m in January. The January 0.8% increase (1.2% y/y) in services imports was led by rises of 4.3% (35.2% y/y) in construction services and 3.9% (12.5% y/y) in travel services, while imports for transport services (-1.4%; -4.7% y/y) and charges for the use of intellectual property (-0.4%; +1.3% y/y) decreased m/m in January.

The U.S. goods trade deficit with China increased to a seasonally adjusted $22.93 billion in January, the largest since October, from $22.85 billion in December. Exports jumped 19.3% (-7.9% y/y) in January, the biggest m/m increase since October 2021, following a 5.7% December drop, while imports rose 6.6% (-2.5% y/y) after a 2.4% December rebound. The goods trade deficit with the European Union rose to a three-month-high $18.08 billion in January from $17.65 billion in December, with exports down 1.6% (-4.9% y/y) and imports down 0.2% (-3.6% y/y). The trade shortfall with Japan widened to $7.34 billion in January, a record high, after narrowing to $5.20 billion in the previous month, reflecting rebounds of 0.9% (-5.7% y/y) in exports and 19.4% (12.5% y/y) in imports. The trade deficit with China remained the largest among the three trading partners.

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.