International Trade: Imports Decline, Deficit Narrows

January 6, 2016
The International Trade Deficit NARROWED by $2.2 billion to $42.4 billion in November, compared with market expectations for an increase to a $44.0 billion deficit. Meanwhile, the prior month's deficit was revised higher from 43.9 billion to 44.6 billion. For the first 11 months of the year, the trade deficit has averaged $44.4 billion, modestly above from the average of $42.1 billion for the same period in 2014. Exports FELL by 0.9% to $182.2 billion after a decline of 1.6% in the prior month. The declines in other goods, industrial supplies and materials, consumer goods and capital goods were partially offset by increases in motor vehicles and parts, food, feed, and beverages. Export growth is now 7.1% BELOW their year ago level, and has been slowing for the past 3 years because of weakening growth in global economic activity. Imports FELL by 1.7% to $224.6 billion after a decline of 0.4% in the prior month. The declines in consumer goods, capital goods, industrial supplies and materials were partially offset by increases in other goods, food, feed, and beverages, motor vehicles and parts. In November, oil imports fell because of modest declines in both oil prices and the volume of oil imports. Bottom Line: The trade deficit narrowed modestly in November as exports declined less than imports. On a trend basis, the trade deficit has still been widening since 2013. Meanwhile, the October and November data indicates that trade will likely have a positive contribution to 2015 Q4 GDP.
Article by contingentmacro