The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit narrowed from $43.8 billion in August to $41.5 billion in September. The improvement stemmed from growth in both goods exports, which rose from $128.7 billion to $134.0 billion, a new record high.
Goods imports were also higher, up from $187.5 billion to $191.5 billion. This suggests a higher level of trade activity in September – something that has been on-again, off-again throughout the year, particularly given global economic weaknesses.
Even with worldwide economic headwinds the September figures reflect stronger growth following significantly slower August data. The increase in goods exports was split between petroleum and non-petroleum sources. Petroleum exports were higher, up from $9.0 billion to $11.2 billion; meanwhile, non-petroleum exports rose from $118.2 billion to $121.4 billion. The petroleum trade balance shrunk to $21.7 billion from $23.5 billion. The non-petroleum goods trade balance widened from $34.9 billion to $35.2 billion, mostly on higher imports.
More specifically, total goods exports were higher for the month in the following categories: industrial supplies and materials (up $3.4 billion); foods, feeds, and beverages (up $1.1 billion); consumer goods (up $487 million); and capital goods, except automotive (up $432 million). The only major category to see declining exports was motor vehicles and parts, which was down by $289 million.
These were the same groupings which also experienced increased goods imports. The largest increase in goods imports came from consumer goods (up $2.7 billion). The following sectors also seeing gains: industrial supplies and materials (up $1.2 billion); capital goods, except automotive (up $586 million); and foods, feeds, and beverages (up $92 million). Automotive imports declined by $854 million.
Looking at data which is not seasonally adjusted, manufactured goods exports continue to be higher year-to-date this year than last. Year-to-date manufactured goods total $765.7 billion, or 6.1 percent higher than over the same time period in 2011.
On a country-by-country basis, there were monthly export gains seen in the South and Central America (up $648 million, not seasonally adjusted), Africa (up $518 million), OPEC nations (up $384 million), and Pacific Rim (up $339 million). Chinese goods exports rose from $8.6 billion to $8.8 billion. European Union goods exports ($21.3 billion) were essentially flat for the month, up by just $8 million. Within Europe, though, there were some positives, with higher exports made to Germany, Italy, and the United Kingdom. Weaker exports to Europe were observed going to Belgium, France, the Netherlands, and Spain.
The narrowing of the trade balance is positive news, particularly as it is a sign that manufacturers are selling more of their goods overseas. However, these numbers continue to be choppy with the goods trade balance up and down throughout the year. Nonetheless, the larger trend has been for the goods trade balance to narrow, improving from a $66.8 billion deficit in January to $57.5 billion in September. Higher year-to-date export growth is even more impressive given the challenges seen worldwide, with slowing global growth clearly dampening potential activity.
Chad Moutray is chief economist, National Association of Manufacturers.
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