International Trade: Imports Decline, Deficit Narrows

May 4, 2016
Bottom Line: The trade deficit narrowed moderately in March with imports declining more than exports. On a trend 12-month average basis, the trade deficit has been still widening since 2013 despite this month’s decline. Net exports made a modest negative contribution to the advance 2016 Q1 GDP growth estimate; the Q1 average for real trade balance for goods suggests this will be revised to be slightly less negative. The International Trade Deficit NARROWED by $6.6 billion to $40.4 billion in March, compared with market expectations for a drop to a $41.2 billion deficit. Meanwhile, the prior month's deficit was revised slightly lower from 47.1 billion to 47.0 billion. For the first 3 months of the year, the trade deficit has averaged $44.4 billion, slightly below from the average of $44.8 billion for the same period in 2015. Exports FELL by 0.9% to $176.6 billion after an increase of 1.1% in the prior month.The declines in consumer goods, industrial supplies and materials, motor vehicles and parts, food, feed, and beverages were partially offset by increases in capital goods and other goods. Export growth is now 5.4% BELOW their year ago level, and has been declining for the past year because of weakening growth in global economic activity. Imports FELL by 3.6% to $217.1 billion after an increase of 1.3% in the prior month. The declines in consumer goods, capital goods, industrial supplies and materials, motor vehicles and parts, food, feed, and beverages were partially than offset by increases in other goods. In March, oil imports increased because of moderate gains in the volume of oil imports. Oil imports 2016 year-to-date levels are still moderately below the 2015 year-to-date levels. Imports are now 9.1% BELOW their year ago level. The import growth has also been declining over the past year.
Article by contingentmacro