International Trade: Slight Widening As Expected

Bottom Line: The trade deficit widened modestly in January with exports rising less than imports. On a trend basis the trade balance had been in a range of 38 - 46B per month for 3+ years. Now the trend is moving just a touch towards a wider deficit. Net exports made a moderate negative contribution to 2016 Q4 GDP growth; this report suggests trade started 1Q17 with a negative contribution, as well. The International Trade Deficit WIDENED by $4.2 billion to $48.5 billion in January, in-line with market expectations and moderately wider than the 43.4B deficit in the same period in 2016. Exports ROSE by 0.6% to $192.1 billion after an increase of 2.7% in the prior month. The declines in capital goods and other goods were more than offset by increases in industrial supplies and materials and motor vehicles and parts. Export growth is now 7.4% ABOVE their year ago level. Imports ROSE by 2.3% to $240.6 billion after an increase of 1.6% in the prior month. The declines in other goods and food, feed, and beverages were more offset by increases in consumer goods and industrial supplies and materials. In January, oil imports increased. Oil imports 2017 year-to-date levels are now moderately below the 2016 year-to-date levels. Imports are now 8.3% ABOVE their year ago level.