The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged marginally higher, up from $38.98 billion in December to $39.10 billion in January. Growth in goods imports (up from $191.43 billion to $193.11 billion) slightly outpaced the increase in goods exports (up from $132.74 billion to $133.76 billion), but this was largely offset by a $535 million improvement in the services trade surplus to $20.25 billion.
The petroleum trade deficit widened from $15.52 billion to $19.29 billion on increased imports and decreased exports. Weather could be one factor in helping to explain the higher petroleum deficit, but another could be the jump in crude oil costs, with the average price for West Texas intermediate crude oil increasing from $95.14 per barrel at the beginning of January to $97.55 a barrel by the end of the month. Meanwhile, the non-petroleum trade deficit narrowed from $41.89 billion to $39.21 billion, suggesting some improvements on net goods exports outside of oil. Manufacturers believe a stronger focus on the export of our energy resources including coal and liquefied natural gas (LNG) will have a positive impact on these numbers. America’s abundance of energy resources is an important export opportunity – but for the fact that the United States is putting its own restrictions on energy exports through slow approval and permitting processes that are limiting U.S. exports of LNG and coal.
Indeed, sectors with higher goods exports in February included industrial supplies and materials (up $1.2 billion), non-automotive capital goods (up $402 million), and consumer goods (up $244 million). Areas with reduced exports for the month included foods, feeds and beverages (down $771 million) and automotive vehicles and parts (down $208 million).
Growth in manufactured goods exports were up somewhat slowly last year, increasing 2.4 percent in 2013. As such, we will be closely following progress in 2014, with optimism that improvements in the global economy should yield better export numbers. In January, manufacturers exported $92.89 billion (not seasonally adjusted), or 1.2 percent more than the $91.77 billion observed in January 2013. So, we are off to another slow start.
Looking at our top exporting partners, there were modest gains observed in most of them so far in January 2014 relative to what was observed in January 2013. For instance, exports to Mexico (up from $17.95 billion to $19.15 billion), China (up from $9.39 billion to $10.36 billion), Japan (up from $5.14 billion to $5.55 billion), and European Union (up from $20.24 billion to $21.50 billion) were all higher this year than last in the first month of the year. With that said, goods exports to our largest trading partner Canada was somewhat lower (down from $23.14 billion to $22.57 billion). But, the year is still early.