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International Trade: Modestly Wider on Higher Imports

January 6, 2017
Bottom Line: The trade deficit widened modestly in November with both exports and imports decreasing modestly. On a trend basis, the trade deficit has been flat amid the usual quarterly volatility. The October/November average for real trade balance for goods is moderately above its Q3 levels, suggesting a negative contribution to the Q4 GDP, a reversal of the positive contribution in the 3Q and mostly baked into forecasts for 2.2% annualized growth in 4Q already.

The International Trade Deficit WIDENED by $2.9 billion to $45.2 billion in November, compared with market expectations for an increase to a $45.4 billion deficit. For the first 11 months of the year, the trade deficit has averaged $41.3 billion, slightly below from the average of $41.7 billion for the same period in 2015.

Exports FELL by 0.2% to $185.8 billion after a decline of 1.8% in the prior month. The declines in capital goods and other goods were partially offset by increases in industrial supplies and materials and consumer goods. Export growth is now 1.2% ABOVE their year ago level.

Imports ROSE by 1.1% to $231.1 billion after an increase of 1.2% in the prior month. The declines in capital goods and consumer goods were more offset by increases in industrial supplies and materials and food, feed, and beverages. In November, oil imports increased. Oil imports 2016 year-to-date levels are now moderately below the 2015 year-to-date levels. Imports are now 2.8% ABOVE their year ago level.