US Trade Deficit Rises In July, Beats Estimates As Oil Imports Slide

The US trade deficit widened in July, growing by 0.3% from a downward revised $43.5 billion to $43.7 billion, and beating expectations of $44.7 billion, as exports decreased more than imports. The goods deficit decreased less than $0.1 billion in July to $65.3 billion. The services surplus decreased $0.2 billion in July to $21.6 billion.

Breaking down the components, first exports:

  • Exports of goods and services decreased $0.6 billion, or 0.3 percent, in July to $194.4 billion. Exports of goods decreased $0.4 billion and exports of services decreased $0.1 billion.
    • The decrease in exports of goods mostly reflected decreases in consumer goods ($0.7 billion) and in automotive vehicles, parts, and engines ($0.6 billion). An increase in capital goods ($0.9 billion) partly offset the decreases.
    • The decrease in exports of services mostly reflected a decrease in travel (for all purposes including education) ($0.3 billion).

And imports:

  • Imports of goods and services decreased $0.4 billion, or 0.2 percent, in July to $238.1 billion. Imports of goods decreased $0.5 billion and imports of services increased less than $0.1 billion.
    • The decrease in imports of goods mostly reflected decreases in automotive vehicles, parts, and engines ($0.8 billion) and in industrial supplies and materials ($0.7 billion). An increase in capital goods ($1.3 billion) partly offset the decreases.
    • Imports of services were nearly unchanged, reflecting small and offsetting changes across all categories.

Broken down by geography, the July figures showed:

  • Surpluses with South and Central America ($3.5), Hong Kong ($2.8), Brazil ($0.8), Saudi Arabia ($0.8), and Singapore ($0.7).
  • Deficits with China ($31.8), European Union ($12.1), Japan ($5.5), Mexico ($5.4), Germany ($5.3), Italy ($2.4), India ($1.9), Taiwan ($1.9), South Korea ($1.8), France ($1.3), Canada ($0.9), United Kingdom ($0.2), and OPEC ($0.1).
  • The surplus with South and Central America increased $0.9 billion to $3.5 billion in July. Exports increased $1.0 billion to $12.9 billion and imports increased $0.1 billion to $9.4 billion.
  • The balance with Saudi Arabia shifted from a deficit of less than $0.1 billion to a surplus of $0.8 billion in July. Exports increased $0.4 billion to $1.9 billion and imports decreased $0.4 billion to $1.2 billion.

The Trade deficit excluding petroleum was at $40.6 billion. in July

A closely watched metric, in light of recent declines in oil exports by OPEC (mostly Saudi Arabia) to the US, showed that July crude oil imports declined to $10.16 billion from $11.12 billion last month, representing 76.1% of total petroleum imports, with oil imports from OPEC falling to 40.4% of the total, while oil imports from Saudi Arabia fell 7.8m barrels. July non-crude petroleum imports widened to $3.2b from $3.1b m/m; 23.9% of total petroleum imports.

  • Crude oil imports averaged 7.585m b/d in July compared to 8.292m b/d in June
  • Oil imported from Canada and Mexico was 47.3% of total in July vs 48.7% in June

At the same time, Petroleum exports rose in real dollars to $10,867b in July after $10,354b in June.

In total, the report was largely in line, and will likely not have a material impact on Q3 GDP estimates.

Comments

Ink Pusher Wed, 09/06/2017 - 10:36 Permalink

Might as well call this report a virtual flat line. Why did they even bother publishing it?*" Imports of meat and vegetables increased, pushing agricultural imports in July to $11.7 billion, the highest on record."