The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit widened from $37.13 billion in March to $40.29 billion in April. The figure for March was revised from its earlier estimate of $38.83 billion, with the newer number making it the lowest level since January 2010. The higher trade deficit in April stemmed primarily from a larger goods trade deficit. Goods exports increased from $129.26 billion to $131.09 billion, and goods imports went from $184.66 billion to $189.71 billion.
The wider trade deficit also stemmed from mostly non-petroleum factors, with the petroleum trade balance narrowing from $20.46 billion to $19.72 billion. The non-petroleum trade balance, meanwhile, widened from $33.71 billion to $37.81 billion. The small improvement in the petroleum balance came from a marginal decline in petroleum imports, down from $30.09 billion to $29.57 billion. The petroleum changes mirrored a very modest decrease in the cost of petroleum, with the price of West Texas intermediate crude falling from averages of $95.31 per gallon in February to $92.94 in March to $92.02 in April.
Looking more specifically at the sectors with export growth, the largest increases were in the consumer goods (up $1.96 billion), non-automotive capital goods (up $885 million), and automotive vehicles (up $586 million). Unfortunately, these were also the same sectors with higher imports, producing a net negative in each case. The change in goods imports for those sectors in April were: consumer goods (up $2.98 billion), non-automotive capital goods (up $1.04 billion), and automobiles (up $1.28 billion). At the same time, exports and imports were lower in the foods, feeds, and beverages and industrial supplies and materials industries.
The net result is continued very slow growth in manufactured goods exports. In the first four months of 2013, manufactured goods exports equaled $384.89 billion (not seasonally adjusted), or 0.9 percent higher than the $381.45 billion. This suggests that manufacturers continue to struggle to grow their overseas sales, with slower economic growth worldwide hampering exports. The recession in Europe and weakness in other key markets has had an impact on new orders.
In 2012, manufactured goods exports increased 5.5 percent over the prior year, and it will be hard for us to match that pace if export growth does not pick up. Of course, we would need to see a 15 percent growth rate or higher for us to achieve the goal of doubling exports by 2015.
As expected, goods exports to Europe are off from where they were last year. Using non-seasonally adjusted data, year-to-date exports to the European Union have fallen from $91.18 billion in the first four months of 2013 to $84.39 billion in the same time period in 2012. The good news is that we do see slight increases to our largest trading partners, Canada (up from 96.46 billion to $98.50 billion) and Mexico (up from $70.20 billion to $73.49 billion). In addition, goods exports to China, our third largest trading partner, rose from $35.42 billion to $37.12 billion. However, the data remain mixed overall, with goods exports higher to South America (up from $58.51 billion to $59.68 billion) but lower to Pacific Rim nations (down from $124.79 billion to $122.42 billion).
The report for April indicates that exports of manufactured goods remain challenged. Yesterday, we learned that the manufacturing sector is in contraction again for the first time since November, and slowing sales were a large factor in this finding. Manufacturers need a stronger global economy for the sector to more fully recover, and while I am still optimistic that the pace of exports will strengthen as we move through the rest of 2013, the year is not off to a great start start on the trade front.
Chad Moutray is chief economist, National Association of Manufacturers.
Latest posts by Chad Moutray (see all)
- Kansas City Fed: Manufacturing Activity in November Pulled Back Somewhat but “Remained Solid” - November 17, 2017
- Housing Starts Jumped to a One-Year High in October - November 17, 2017
- Home Builder Optimism Remained Highly Elevated in November - November 16, 2017