The U.S. balance of trade in goods and services worsened by $3 billion in March, to a seasonally adjusted balance of $62 billion, an annual rate of $745 billion. The $3 billion change was almost totally in goods trade, the result of a $6 billion increase in the petroleum deficit and an improvement of $3 billion in non-petroleum trade.
Two-thirds of the improvement in non-petroleum trade was in manufactured goods, with the seasonally-adjusted trade balance of $40 billion being $2 billion smaller than in February.
March manufactured goods exports of $95.8 billion, seasonally-adjusted, represented a one-month jump of 4.5 percent, the highest one-month increase in three years – and setting a new record high, exceeding the previous peak of $94.2 billion in July 2008.
The growth in March compensated for the slow January and February growth and brought the year-over-year (March 2011 compared to March 2010) growth up to 14.5 percent, very close to the 15 percent annual growth path needed to double exports in five years.
The growth was paced by basic manufactured goods exports (other than advanced technology exports), which were up 17.5 percent over March 2010. Advanced technology export growth lagged, up only 6 percent. Basic manufactured goods are more sensitive to price changes and appear to be benefitting more from the appreciation of other currencies against the dollar – which makes price-sensitive U.S. exports more attractive in foreign currencies. Organic chemical exports, for example jumped 14 percent over February.
Manufactured goods imports grew as well, but considerably slower than exports in March, leading to the decline in the trade deficit.
Detailed data on the country distribution of U.S. manufactured goods trade will be available Tuesday afternoon, and will be reported on shortly in another post.
Frank Vargo is vice president for international economic affairs at the National Association of Manufacturers.