The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit rose from $34.56 billion in November to $38.70 billion in December. The drop stemmed entirely from a drop in good exports, down from $137.05 billion to $132.76 billion. Goods imports were essentially unchanged, up from $191.28 billion to $191.58 billion. Meanwhile, the service sector trade surplus increased somewhat, up from $19.68 billion to $20.12 billion.
Despite the higher trade deficit in December, it is notable that the deficit narrowed in 2013 as a whole. The average monthly trade deficit in 2013 was $39.29 billion, or $5.26 billion less than the $44.56 billion average observed in 2012. Behind this figure, the goods trade deficit declined from an average of $61.79 billion in 2012 to $58.60 billion in 2013, with the service sector trade surplus rising from $17.24 billion to $19.30 billion.
The decline in goods exports in December were primarily from non-petroleum factors. While the petroleum trade deficit increased slightly (up from $9.07 billion to $9.59 billion), the larger contributor to the higher total trade deficit stemmed from the non-petroleum trade deficit (up from $41.36 billion to $45.18 billion). With that said, one of the bigger trade stories of the past year has been the narrowing of the petroleum trade deficit, down from an average of $13.15 billion each month in 2012 to $11.00 billion in 2013. Increased exports and fewer imports of petroleum led to this result.
Looking specifically at the goods exports sector, the December numbers were mostly lower, as noted. There were reduced exports in the industrial supplies and materials (down $1.1 billion), non-automotive capital goods (down $1.1 billion), automotive vehicles and parts (down $769 million), and consumer goods (down $708 million) sectors. On the positive side, exports of foods, feeds and beverages increased by $364 million, mainly due to higher exports for soybeans and wheat.
Growth in manufactured goods exports was disappointingly slow last year. Manufactured goods exports totaled $1.183 trillion in 2013 using non-seasonally adjusted data. This was up just 1.6 percent from the $1.164 trillion observed in 2012. As such, it indicates that growth in manufactured goods exports remains soft, decelerating from the 5.7 percent growth rate observed through all of last year. 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.
Hopefully, stabilization in the global economy and cautious optimism for better worldwide growth rates in 2014 will produce improved manufactured goods exports moving forward.
Chad Moutray is the chief economist, National Association of Manufacturers.
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