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June Trade Deficit Smaller Than Expected, Ex-Petroleum Deficit Near Record

Tyler Durden's picture




 

Moments ago the BEA reported that the June trade deficit (which is the last month of Q2 GDP) came in $3 billion better than expected, declining from $44.7 billion to $41.5 billion, beating consensus $44.8 billion, as exports increased and imports decreased. The previously published May deficit was $44.4 billion. The goods deficit decreased $3.0 billion from May to $60.3 billion in June; the services surplus increased $0.1 billion from May to $18.7 billion in June.

The breakdown:

Exports

Exports of goods and services increased $0.3 billion in June to $195.9 billion, reflecting increases in both exports of goods and exports of services.*

  • The increase in exports of goods mainly reflected increases in consumer goods and in automotive vehicles, parts, and engines. Other goods and foods, feeds, and beverages decreased.
  • The increase in exports of services was more than accounted for by an increase in travel (for all purposes including education). Partly offsetting was a decrease in transport, which includes freight and port services and passenger fares.

Imports

Imports of goods and services decreased $2.9 billion in June to $237.4 billion, mainly reflecting a decrease in imports of goods. Imports of services were nearly unchanged.

  • The decrease in imports of goods mostly reflected decreases in consumer goods and in automotive vehicles, parts, and engines.
  • Imports of services were nearly unchanged as an increase in charges for the use of intellectual property, which included payments for the rights to broadcast the portion of the 2014 soccer World Cup that occurred in June, was mostly offset by a decrease in transport.

Goods by geographic area (seasonally adjusted, Census basis)

  • The goods deficit with the European Union decreased from $12.8 billion in May to $11.5 billion in June. Exports increased $0.8 billion to $24.2 billion, and imports decreased $0.5 billion to $35.7 billion.
  • The goods deficit with India decreased from $2.1 billion in May to $1.3 billion in June. Exports increased $0.3 billion to $1.9 billion, and imports decreased $0.5 billion to $3.2 billion.
  • The goods deficit with China increased from $28.1 billion in May to $29.2 billion in June. Exports were nearly unchanged at $9.7 billion, and imports increased $1.0 billion to $38.9 billion.

All of the above is good news... for Q2 GDP, which will be revised some 0.2% higher on this news (offsetting major downward inventory reductions which will appear in subsequent GDP reports). However, the rebound in H1 trade means - to borrow a line from the Keynesians - less Q3 GDP growth from trade, and as a result we expect Q3 GDP to be revised, in turn, lower.

Finally, and perhaps most importantly, the trade deficit excluding the shale boom, i.e., America's reduced petroleum import needs which may last for a few more years before shale oil too is exhausted - just printed close to record highs. In other words, US trade ex oil is about as bad as it has ever been!

 

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Wed, 08/06/2014 - 08:46 | 5053289 Spungo
Spungo's picture

So oil is pretty much the only thing holding up the US economy? That sounds familiar. USSR, Venezuela, etc.

Wed, 08/06/2014 - 08:52 | 5053315 JamesBond
JamesBond's picture

Well, Riussia doesn't make anything anyway...

===========

"I do think it's important to keep perspective. Russia doesn't make anything," Obama said in the interview.

 

"Immigrants aren't rushing to Moscow in search of opportunity. The life expectancy of the Russian male is around 60 years old. The population is shrinking," he said.

Wed, 08/06/2014 - 09:10 | 5053374 disabledvet
disabledvet's picture

I would like to fact check that actually. Don't know of any reporters who question the White House on that one.

We are importing Enola....errr, EBOLA...that we might have to start figuring that in the growth figures as well. Good thing we have all the oil we need because if that outbreak hits Llagos you're talking containment of all of West Africa.

"Start from the off shore oil dereks and work east."

Wed, 08/06/2014 - 09:37 | 5053485 SelfGov
SelfGov's picture

"Good thing we have all the oil we need..."

 

Hardly. The US consumes more oil every hour than the average Bakken or Eagle Ford well will produce over its lifetime.

 

There is no combination of US oil resources that can sustainably supply 18+ million barrels every day.

Wed, 08/06/2014 - 08:47 | 5053293 buzzsaw99
buzzsaw99's picture

this is what the maggots want

Wed, 08/06/2014 - 08:50 | 5053304 AdvancingTime
AdvancingTime's picture

America imports around five hundred billion dollars more from other countries every year than they export. This means we have a giant trade deficit, when we add this to our enormous government deficit it is easy to see that we are living far beyond our means. The Fed has been superbly entrepreneurial when it comes to Ponzi schemes or pseudo-economics hocus-pocus that has allowed the current situation to develop.

The Fed  must at some point begin to ponder a real exit strategy and end the massive and corrosive stimulus that the economy has come to expect. To make matters worse little has been done to address our structural problems and make America more competitive, this will massively thwart growth going forward. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/06/exit-strategy-from-qe-remains-elu...

Wed, 08/06/2014 - 08:53 | 5053317 Space Animatoltipap
Space Animatoltipap's picture

Indeed. It's totally ludicrous to be interested in whether the trade deficit is up a few billion or down a few billion.

Wed, 08/06/2014 - 09:00 | 5053338 Sudden Debt
Sudden Debt's picture

The economic growth should be looked at from the ground up.

you know...

first you hit rock bottom and...

Wed, 08/06/2014 - 08:51 | 5053308 Dr. Engali
Dr. Engali's picture

It's only a matter of time before somebody starts liberating us from our oil by bombing some freedom into us.

Freedom is on the march.

Wed, 08/06/2014 - 09:02 | 5053345 Sudden Debt
Sudden Debt's picture

The only country who would do that is the US itself.

For everybody else, it's just all to clear it's not economicly viable to do so.

 

Wed, 08/06/2014 - 09:04 | 5053352 Dr. Engali
Dr. Engali's picture

I fully expect that in the not too distant future.

Wed, 08/06/2014 - 09:02 | 5053349 101 years and c...
101 years and counting's picture

to be fair, the depression is so bad, the US now also exports nearly 1.2 million barrels of gasoline/diesel per day now vs importing 800K barrels/day back in 2007. i dont expect this trend to stop anytime soon.

Wed, 08/06/2014 - 09:14 | 5053398 disabledvet
disabledvet's picture

No mention of natural gas here either. That contains a hydrogen atom...but that in a fuel cell and you got yerself one mighty powerful battery pilgrim!

Wed, 08/06/2014 - 09:13 | 5053385 Smegley Wanxalot
Smegley Wanxalot's picture

Well now we know why the POSident doesn't want us producing more oil.  It may reduce the deficit and slow the demise of the nation, and Barack Ofuckwit can't have that.

Wed, 08/06/2014 - 09:17 | 5053410 disabledvet
disabledvet's picture

That's Wall Street not Washington. The trading profits in oil are absolutely huge. If that all converts over to natural gas...well, somewhere in there you might get a job two created.

Wed, 08/06/2014 - 09:12 | 5053387 Mitch Comestein
Mitch Comestein's picture

Why the hell does it matter that ex-petro is so high.  It is an export, or net less of an import.  That is good for a country.  

 

 

Wed, 08/06/2014 - 14:12 | 5054965 MedTechEntrepreneur
MedTechEntrepreneur's picture

Well, one reason is to show why Obama (TPTB) are trying to start shit with Russia.  TPTB wants Putins natural gas business.

 The US needs to export energy to bring down our balance of trade (since we dont make anything anymore) and save the dollar (temporarily).  There is a huge serge in ship building of LNG supertankers.  Many new ones to come online this year and next.  Coincidence?

Wed, 08/06/2014 - 09:15 | 5053403 AynRandFan
AynRandFan's picture

Ex oil makes a difference of $5 billion?

Meh.

Wed, 08/06/2014 - 09:16 | 5053406 ekm1
ekm1's picture

Question:

 

What is more fiction, BLS or BEA numbers?

Wed, 08/06/2014 - 09:18 | 5053416 papaswamp
papaswamp's picture

Anyone know why a bunch of the series were killed off at the FRED?
http://research.stlouisfed.org/fred2/categories/125

Thu, 08/07/2014 - 08:24 | 5058059 o2sd
o2sd's picture

Too much truthiness. There was a FRED employment series I used to follow that got killed off also.

 

Wed, 08/06/2014 - 11:28 | 5054137 q99x2
q99x2's picture

If Washington D.C.  and the bankstgers starve everyone they'll have 0 trade deficit and if they remove all the jobs unemployment will be 0.

 

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