Trade Deficit Snaps Back In January, Larger Than Expected

Tyler Durden's picture

So much for that December plunge in the US trade deficit, which plunged from $48.6 billion to three year low of $38.5 billion supposedly on a drop in energy imports, but in reality was due to a drop in broad imports as the US economy ground to a halt ahead of the Fiscal Cliff. In January, or after the stop gap measure to allow the economy to continue, things went back to normal, with the US returning to doing what it does best: importing, especially importing expensive energy, and sure enough the deficit spiked promptly back to $44.4 billion - it recent long-term average - as exports were $2.2 billion less than December exports of $186.6 billion while January imports were $4.1 billion more than December imports of $224.8 billion. Immediate result: look for banks to trim 0.2-0.3% GDP points from their Q1 GDP forecasts.

Drilling down some more:

The December to January decrease in exports of goods reflected decreases in industrial supplies and materials ($2.6 billion) and other goods ($1.0 billion). Increases occurred in capital goods ($0.7 billion); foods, feeds, and beverages ($0.4 billion); consumer goods ($0.3 billion); and automotive vehicles, parts, and engines ($0.2 billion).

 

The December to January increase in imports of goods reflected increases in industrial supplies and materials ($4.0 billion); other goods ($0.7 billion); and capital goods ($0.5 billion). Decreases occurred in consumer goods ($0.9 billion) and automotive vehicles, parts, and engines ($0.7 billion). Foods, feeds, and beverages were virtually unchanged.

 

The January 2012 to January 2013 increase in exports of goods reflected increases in foods, feeds, and beverages ($1.2 billion); capital goods ($1.1 billion); consumer goods ($1.0 billion); and other goods ($0.3 billion). Decreases occurred in industrial supplies and materials ($0.3 billion) and automotive vehicles, parts, and engines ($0.3 billion).

 

The January 2012 to January 2013 decrease in imports of goods reflected decreases in industrial supplies and materials ($4.2 billion); automotive vehicles, parts, and engines ($0.3 billion); and foods, feeds, and beverages ($0.2 billion). Increases occurred in consumer goods ($1.4 billion); capital goods ($1.3 billion); and other goods ($0.3 billion).

As for the geographic focus, here is which countries were the biggest January trading partners:

The January figures show surpluses, in billions of dollars, with Hong Kong $2.7 ($4.0 for December), Australia $1.2 ($1.7), Singapore $0.7 ($1.1), and Brazil $0.9 ($1.3). Deficits were recorded, in billions of dollars, with China $27.8 ($24.5), European Union $8.6 ($8.7), OPEC $6.4 ($3.4), Japan $6.1 ($5.7), Canada $4.9 ($3.6), Germany $4.2 ($5.4), Mexico $3.6 ($3.9), Korea $2.1 ($1.1), Venezuela $2.0 ($1.3), Ireland $1.9 ($1.5), Saudi Arabia $1.9 ($1.7), and India $1.5 ($0.5)

And as much as it hurts us to crush idiotic memes, the January data shows that rather than indicative of US "energy independence" leading to a trade surplus, and a soaring USD, any times soon, the December plunge in the deficit was merely a politically-driven fluke.

Source: Census