U.S. Trade Deficit Narrowed Somewhat in November on Reduced Goods Imports, Exports

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit narrowed somewhat, down from $44.58 billion in October to $42.37 billion in November. These data points mirror averages from the past two years. For instance, the year-to-date average for 2015 was $44.37 billion, which was up from the overall 2014 average of $42.36 billion. The reduced trade deficit in this latest report stemmed mostly from reduced goods imports (down from $187.18 billion to $183.48 billion), with goods exports also slightly lower (down from $123.61 billion to $122.19 billion). Meanwhile, the service sector trade surplus edged down marginally from $18.99 billion to $18.91 billion.

At least part of the decline in goods exports could be explained by a reduction in petroleum exports (down from $7.53 billion to $7.26 billion) to its lowest level since December 2010. As a result, the petroleum trade deficit increased from $4.48 billion to $5.36 billion. Still, the petroleum trade deficit has declined significantly over the course of the past year on reduced energy prices. The monthly average has decreased from $15.81 billion for all of 2014 to $6.92 billion through the first 11 months of 2015.
 The overall trend in this release is the softness of international trade across-the-board. Goods exports were off for industrial supplies and materials (down $677 million) and consumer goods (down $644 million), with the volume of the former at its slowest pace since September 2010. There were very small increases for exports of automotive vehicles and parts (up $85 million) and food, feeds and beverages (up $33 million), with the latter buoyed by stronger wheat exports (up $197 million). On the imports side of the ledger, the data were mostly lower. This included reduced imports for consumer goods (down $2.95 billion), capital goods (down $597 million) and industrial supplies and materials (down $339 million).

For manufacturers, global headwinds have had a significantly negative impact on their ability to grow international demand. Manufactured goods exports totaled $1,025.32 billion year-to-date through the first 11 months of the year using non-seasonally adjusted data. This was down 6.39 percent from the $1,095.30 billion observed in the same time period last year.

This trend extends to the top four markets for U.S.-manufactured goods: Canada (down from $287.69 billion year-to-date to $259.02 billion), Mexico (down from $221.47 billion to $217.80 billion), China (down from $111.51 billion to $106.06 billion) and Japan (down from $61.05 billion to $57.71 billion). In addition, exports of manufactured goods to the Europe, our second largest region after North America, were also lower year-to-date (down from $306.83 billion to $294.73 billion).

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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