International Trade: Widening Trend Continued

Bottom Line: The trade deficit widened modestly more than expected again in December with imports, led by autos, cell phones and pharmaceuticals, growing slightly faster than exports. Net exports made a moderate negative contribution to the advance 2017 Q4 GDP growth estimate; the Q4 average for real trade balance for goods suggests this will be revised to be slightly less negative. On a trend basis the trade deficit had been steady from for 3 years but started to widen sharply in 2017. The International Trade Deficit WIDENED by $2.7 billion to $53.1 billion in December, compared with market expectations for an decline to a $52.1 billion deficit. For 2017, the trade deficit averaged $47.2 billion, moderately above from the average of $42.1 billion for 2016. Exports ROSE by 1.8% to $203.4 billion after an increase of 2.3% in the prior month. The declines in and were more than offset by increases in and Export growth is now 7.3% ABOVE their year ago level. Imports ROSE 2.5% to $256.5 billion after an increase of 2.5% in the prior month. The declines in other goods and were more offset by increases in consumer goods and motor vehicles and parts. In December, oil imports decreased. Oil imports 2017 year-to-date levels are now moderately below the 2016 year-to-date levels. Imports are now 9.5% ABOVE their year ago level.