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International Trade: Modestly Wider on Higher Imports

December 6, 2016
Bottom Line: The trade deficit widened moderately in October with exports falling modestly and imports rising modestly. On a trend basis, the trade deficit has been hovering around 40B dollars for nearly three years now. The October level for real trade balance for goods is moderately above its Q3 levels, suggesting 4th Quarter started with trade as a modest drag on GDP.

The International Trade Deficit WIDENED by $6.4 billion to $42.6 billion in October, compared with market expectations for an decline to a $42.0 billion deficit. For the first 10 months of the year, the trade deficit has averaged $40.9 billion, slightly below from the average of $41.8 billion for the same period in 2015.

Exports FELL by 1.8% to $186.4 billion after an increase of 0.9% in the prior month. The declines in food, feed, and beverages and industrial supplies and materials were partially offset by increases in other goods and capital goods. Export growth is now 0.4% ABOVE their year ago level.

Imports ROSE by 1.3% to $229.0 billion after a decline of 1.2% in the prior month. The declines in motor vehicles and parts and industrial supplies and materials were more offset by increases in consumer goods and capital goods. In October, oil imports decreased. Oil imports 2016 year-to-date levels are now moderately below the 2015 year-to-date levels. Imports are now 0.8% ABOVE their year ago level.