The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged slightly higher from $38.64 billion in July to $38.80 billion in August. So far this year, the trade deficit has averaged $39.73 billion, down from an average of $46.40 billion and $44.55 billion in 2011 and 2012, respectively. This suggests some improvement on the trade front year-to-date, which is entirely welcome.
Between July and August, however, the data were not dramatically different. Goods exports were off from $132.69 billion to $132.44 billion, with goods imports down from $190.79 billion to $190.66 billion. The services trade balance was also mostly unchanged, with the services trade surplus down marginally from $19.46 billion to $19.42 billion. Likewise, petroleum was not much of a factor either. The petroleum trade deficit narrowed slightly from $10.30 billion to $10.20 billion. Note that the petroleum trade deficit has become much smaller over the course of this year as exports have increased and imports have fallen; the petroleum deficit in August 2012 was $13.73 billion.
Looking specifically at goods exports by sector, the data in August were mostly mixed. Falling exports in industrial supplies and materials (down $1.3 billion) and foods, feeds and beverages (down $388 million) were mostly offset by rising exports in motor vehicles (up $689 million), consumer goods (up $342 million), and non-automotive capital goods (up $210 million). Meanwhile, the largest gain in goods imports came from non-automotive capital goods (up $978 million), with consumer goods imports off the most (down $757 million).
Despite progress in the larger trade deficit year-to-date, we continue to see somewhat disappointing growth for manufactured goods exports. In the first eight months of 2013, manufactured goods exports equaled $786.14 billion (not seasonally adjusted), or 1.8 percent higher than the $772.36 billion observed in the same time period last year. This represents a marginal improvement from the 1.6 percent pace observed in July. Yet, it remains lower the 5.7 percent growth rate observed in all of 2012, and it is well below the 15 percent rate that would be needed to double exports by 2015, as outlined in the President’s National Export Initiative.
Europe remains one of the weaker regions for export growth. Using non-seasonally adjusted data, year-to-date exports to the European Union have fallen from $179.34 billion to $172.57 billion. The good news is that we have seen modest gains in many of our largest trading partners, including increases in Canada (up from $195.80 billion to $199.58 billion), Mexico (up from $142.87 billion to $149.46 billion), and China (up from $70.00 billion to $73.10 billion). Other regional data were mixed, with exports to the Pacific Rim countries essentially flat year-to-date (down from $248.90 billion to $248.39 billion) while export to South America were higher (up from $118.66 billion to $122.57 billion).
Chad Moutray is the chief economist, National Association of Manufacturers.