International Trade: Exports Decline, Deficit Widens

Bottom Line: The trade deficit widened modestly in December as exports declined and imports increased slightly. On a trend basis, the trade deficit has been widening since 2013. Net exports made a modest negative contribution to the advance 2015 Q4 GDP growth estimate; the Q4 average for real trade balance for goods is modestly above its Q3 levels. These data suggest a small negative revision to that estimate. The International Trade Deficit WIDENED by $1.1 billion to $43.4 billion in December, compared with market expectations for an increase to a $43.2 billion deficit. Meanwhile, the prior month's deficit was revised slightly lower from 42.4 billion to 42.2 billion. For the past 12 months of the year, the trade deficit has averaged $44.3 billion, modestly above from the average of $42.4 billion for the same period in 2015. Exports FELL by 0.3% to $181.5 billion after a decline of 0.9% in the prior month. The declines in motor vehicles and parts, industrial supplies and materials, food, feed, and beverages, capital goods and other goods were partially offset by increases in consumer goods. Export growth is now 6.9% BELOW their year ago level, and has been declining for the past year because of weakening growth in global economic activity. Imports ROSE by 0.3% to $224.9 billion after a decline of 1.8% in the prior month. The increases in motor vehicles and parts, industrial supplies and materials and food, feed, and beverages were partially offset by declines in consumer goods, other goods and capital goods In December, oil imports increased because of moderate gains in the volume of oil imports. Oil imports 2015 year-to-date levels are still moderately below the 2015 year-to-date levels. Imports are now 6.5% BELOW their year ago level. The import growth has also declined over the past year.