US Trade Deficit Shrank In November, China Exports Crash

After hitting a record in October, the delayed data for the US Trade Balance (Deficit) in November showed the deficit shrank dramatically.

Against expectations of a small drop to $54.0 billion, the US trade deficit dropped 11.5% to 49.3 billion - smaller than the lowest estimate of 56 economists ($51.6bn to $60bn)...

Under the hood:

  • Imports fell 2.9% in Nov. to $259.19b from $266.88b in Oct.

  • Exports fell 0.6% in Nov. to $209.87b from $211.18b in Oct.

November imports of automotive vehicles, parts, and engines ($32.1 billion) were the highest on record.

November exports of capital goods ($48.4 billion) were the highest on record.

And we suspect - though data is limited for now, that a lot of the deficit shrinkage was due to a drop in the November petroleum deficit to $0.6 billion - the lowest on record.

Is this the start of the reversal of Trump's trade deficit dive? We will know soon when the delayed data is released (but weakness in imports and exports is not a good sign) which shows that the China trade deficit did indeed shrink...

As exports to China plunge...

And at the same time, the November surplus with South and Central America ($5.4 billion) was the highest on record, and November exports to Japan ($6.9 billion) were the highest on record.