Trade Deficit Improves In November Despite Trade Slowdown, As "Exports Decrease Less Than Imports"

Tyler Durden's picture




 

While the recent dramatic revision in construction spending - a direct input into GDP - which as we noted earlier this week, was a huge revision in the series  by the US government which admitted to "processing errors" would lead to substantial downward revisions to recent GDP prints, moments ago the US November Trade deficit printed at $42.4 billion, down from $44.6 billion in October and better than the $44.0 billion consensus expectation.

However, instead of suggesting on overall improvement, the only reason the deficit improved is because as the BEA admitted, "exports decreased less than imports", in other words, both decreased. Specifically, imports fell 1.7% in Nov. to $224.59b from $228.36b in Oct, while exports fell 0.9% in Nov. to $182.21b from $183.78b in Oct. A key driver was another decline in petroleum imports which fell $262 million to a total of $10.7 billion courtesy of the drop in oil prices.

From the report:

The U.S. monthly international trade deficit decreased in November 2015 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $44.6 billion in October (revised) to $42.4 billion in November, as exports decreased less than imports. The previously published October deficit was $43.9 billion. The goods deficit decreased $2.3 billion from October to $61.3 billion in November. The services surplus decreased $0.1 billion from October to $18.9 billion in November.

The full breakdown, first Exports

  • Exports of goods and services decreased $1.6 billion, or 0.9 percent, in November to $182.2 billion. Exports of goods decreased $1.4 billion and exports of services decreased $0.1 billion.
  • The decrease in exports of goods mainly reflected decreases in other goods ($0.7 billion), in industrial supplies and materials ($0.7 billion), and in consumer goods ($0.6 billion).
  • The decrease in exports of services mainly reflected decreases in transport ($0.1 billion), which includes freight and port services and passenger fares, and in government goods and services ($0.1 billion).

Then Imports

  • Imports of goods and services decreased $3.8 billion, or 1.7 percent, in November to $224.6 billion. Imports of goods decreased $3.7 billion and imports of services decreased $0.1 billion.
  • The decrease in imports of goods mainly reflected decreases in consumer goods ($3.0 billion) and in capital goods ($0.6 billion).
  • The decrease in imports of services mainly reflected a decrease in travel (for all purposes including education) ($0.1 billion).

And the breakdown of trade by key geographic area:

  • The deficit with Mexico decreased from $6.3 billion in October to $5.4 billion in November. Exports decreased $0.9 billion to $18.8 billion and imports decreased $1.8 billion to $24.2 billion.
  • The surplus with members of OPEC increased from $0.4 billion in October to $1.1 billion in November. Exports increased $1.3 billion to $6.5 billion and imports increased $0.6 billion to $5.4 billion.
  • The deficit with Canada increased from $0.4 billion in October to $0.9 billion in November. Exports decreased $0.1 billion to $22.7 billion and imports increased $0.4 billion to $23.5 billion.

In short: global trade continues to slow, but because the price of imports is tumbling, and because exports are slowing less than imports, this is an improvement and may boost Q4 GDP marginally from already sub-stall speed levels.

5
Your rating: None Average: 5 (1 vote)
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 01/06/2016 - 08:56 | 7004135 MFL8240
MFL8240's picture

All the good new cominmg out now just at a time the stock market craters and Gold heading north. Laughable!

Wed, 01/06/2016 - 09:11 | 7004215 two hoots
two hoots's picture

Less is more.

Wed, 01/06/2016 - 09:29 | 7004316 Lady Jessica
Lady Jessica's picture

This is one of those ZH posts whose significance is inversely proportional to the number of comments it receives

Wed, 01/06/2016 - 10:06 | 7004507 Mr. Cynic
Mr. Cynic's picture

If I'm reading you correctly you are saying this is significant.  Agreed.

Wed, 01/06/2016 - 09:30 | 7004320 TheAntiProgressive
TheAntiProgressive's picture

So the USA imported only 1/2 Trillion dollars over the year and taking that X 10 which is what the politicians all do then we will import 5 trillion from overseas generally manufactured products.  This is just ducky.

Wed, 01/06/2016 - 09:42 | 7004385 TrustbutVerify
TrustbutVerify's picture

Buy less foreign products.  Buy more real American made products - not just phony US branded products.  It takes some searching but it can be done.  

Wed, 01/06/2016 - 10:05 | 7004501 Mr. Cynic
Mr. Cynic's picture

This is one of those bad-news-is-good-news scenarios.

Both exports and imports dropped so trade is on a downward trend........ but HEY!!, the trade deficit has narrowed!!  GOOD NEWS!

Wed, 01/06/2016 - 11:01 | 7004781 nidaar
nidaar's picture

Does that mean usd can go ever higher?

Wed, 01/06/2016 - 12:33 | 7005406 hound dog vigilante
hound dog vigilante's picture

exports & imports decreasing = economic contraction.

we are in recession.

Do NOT follow this link or you will be banned from the site!