International Trade: Exports Decline, Deficit Widens

March 4, 2016
Bottom Line: The trade deficit widened modestly in January with exports declining more than imports. On a trend basis, the trade deficit has been widening since 2013. The January level for real trade balance for goods is moderately above its Q4 levels, suggesting a negative contribution to the Q1 GDP. The International Trade Deficit WIDENED by $1.0 billion to $45.7 billion in January, compared with market expectations for a decline to a $44.0 billion deficit. Meanwhile, the prior month's deficit was revised slightly higher from 43.4 billion to 44.7 billion. For the first month of the year, the trade deficit has averaged $45.7 billion, modestly above from the average of $43.6 billion for the same period in 2015. Exports FELL by 2.1% to $176.5 billion after a decline of 0.3% in the prior month. The declines in capital goods, industrial supplies and materials, consumer goods, food, feed, and beverages and other goods were partially offset by increases in motor vehicles and parts. Export growth is now 6.6% BELOW their year ago level, and has been declining for the past year because of weakening growth in global economic activity. Imports FELL by 1.3% to $222.1 billion after an increase of 0.2% in the prior month. The declines in industrial supplies and materials, capital goods, other goods and consumer goods were partially offset by increases in motor vehicles and parts, food, feed, and beverages. In January, oil imports decreased because of modest declines in both oil prices and the volume of oil imports. Oil imports 2016 year-to-date levels are now moderately below the 2015 year-to-date levels. Imports are now 4.5% BELOW their year ago level. The import growth has also been declining over the past year.
Article by contingentmacro