The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit narrowed slightly from $41.87 billion in February to $40.38 billion in March. The average trade deficit in the first three months of 2014 was $40.51 billion, up somewhat from the $39.57 billion average of 2013 but down from the $44.56 billion average of 2012. The change in the March deficit resulted from an increase in goods exports (up from $131.38 billion to $135.10 billion) that mostly offset the rise in goods imports (up from $192.73 billion to $195.84 billion). In addition, the service sector surplus increased by $899 million in March.
Looking specifically at goods exports by sector, the largest increase came from non-automotive capital goods (up $2.11 billion). Civilian aircraft, including engine components, accounted for $1.53 billion of this figure. Other gainers included industrial supplies and materials (up $888 million); automotive vehicles, parts and engines (up $596 million); and foods, feeds and beverages (up $97 million). Consumer goods exports declined by $304 million for the month, led by decreases in pharmaceuticals and cell phones.
Growth in manufactured goods exports continue to disappoint. Exports in the first three months of 2014 were $286.90 billion using non-seasonally adjusted data. This was down 0.1 percent from the $287.31 billion in manufactured goods exports in the first quarter of 2013. As such, it indicates that growth in manufactured goods exports were essentially unchanged this year despite some economic progress abroad in recent months, continuing a trend that we saw last year.
In 2013, manufactured goods exports rose 2.4 percent, decelerating from the 5.7 percent annual growth rate observed in 2012. It is also 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, cautious optimism for better worldwide growth rates will produce improved manufactured goods exports moving forward.
Chad Moutray is the chief economist, National Association of Manufacturers.