Trade Deficit Shrinks in November Primarily Due to Falling Imports

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The US trade deficit unexpectedly narrowed in November primarily because imports fell. The improvement is temporary.

The U.S. Census Bureau's report on International Trade shows the goods and services deficit was $49.3 billion in November, down $6.4 billion from $55.7 billion in October, revised.

November exports were $209.9 billion, $1.3 billion less than October exports. November imports were $259.2 billion, $7.7 billion less than October imports. The November decrease in the goods and services deficit reflected a decrease in the goods deficit of $6.7 billion to $71.6 billion and a decrease in the services surplus of $0.3 billion to $22.3 billion.

Year-to-date, the goods and services deficit increased $51.9 billion, or 10.4 percent, from the same period in 2017. Exports increased $157.1 billion or 7.3 percent. Imports increased $208.9 billion or 7.9 percent.

Real Goods in 2012 Dollars – Census Basis

  • The real goods deficit decreased $7.5 billion to $80.8 billion in November.
  • Real exports of goods increased $0.4 billion to $150.0 billion.
  • Real imports of goods decreased $7.1 billion to $230.8 billion.

October Export Revisions

  • Exports of goods were revised up less than $0.1 billion.
  • Exports of services were revised up $0.1 billion.

October Import Revisions

  • Imports of goods were revised up $0.2 billion.
  • Imports of services were revised up $0.2 billion.

Select Countries

  • The deficit with China decreased $2.8 billion to $35.4 billion in November. Exports decreased $0.1 billion to $7.4 billion and imports decreased $2.9 billion to $42.8 billion.
  • The deficit with Canada decreased $1.3 billion to $0.8 billion in November. Exports decreased $0.4 billion to $24.5 billion and imports decreased $1.7 billion to $25.3 billion.
  • The deficit with Mexico rose $0.4 billion to $6.8 billion. Exports decreased by $0.3 billion to $22.4 billion. Imports rose by $0.3 billion to $29.1 billion. Rounding errors account for the small discrepancy.
  • The deficit with Taiwan increased $0.4 billion to $1.6 billion in November. Exports decreased $0.3 billion to $2.5 billion and imports increased $0.1 billion to $4.1 billion.

Bloomberg Comment

Via Bloomberg, "The narrowing of the trade balance in November is unsustainable and was due to one-off factors -- some of which are poised to reverse soon. We expect the trade gap to widen in December, translating into a net drag on growth at the end of 2018. All told, monetary policy is unlikely to be driven by changes in trade policy."

Delays

It's February, well into the first quarter, so it's hard to get excited over reports this stale.

​The report on productivity and costs for the 4th quarter, due today, was delayed.

Mike "Mish" Shedlock

Comments (1)
No. 1-1
2banana
2banana

The vast majority of the Trump Tariffs on China took effect on Jan 01, 2019.

Importers were feverishly importing in 2018 to front load.

American warehouses are full.

Less imports will be the norm for the near future.