The Census Bureau releases a detailed set of data on international trade based on figures compiled from documents collected by the U.S. Customs and Border Protection. The data are aggregated into approximately 140 export and 140 import end-use categories which are then used as the basis for computing the seasonal and trading-day adjusted data. These data are also used by the Bureau of Economic Analysis for use in the NIPAs and in the international transactions accounts (balance of payments accounts).
Imports indicate demand for foreign goods and services here in the U.S. Exports show the demand for U.S. goods in countries overseas. This report gives a breakdown of U.S. trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country. It is important to examine trends for exports and imports separately because they can deviate significantly since the value of the dollar versus various foreign currencies does not always move in tandem.
In May, the Census Bureau reported exports of $187.1 billion and imports of $232.1 billion with a trade deficit of $45.0 billion, up from $40.1 billion in April. The goods deficit in May increased by $5.0 billion from to $63.4 billion, and the services surplus increased $0.2 billion to $18.4 billion. Based on a three-month moving average, the overall trade deficit rose modestly in May, after falling consistently since the beginning of 2012. Exports continue to be relatively strong, and imports rose slightly on a three-month moving average basis.
At a detail level, international travel into the United States continues to be a strong net “export,” and on a year over year basis, the country has seen significant growth in the export of automobiles. Other products with sizable export growth include: Animal feeds, petroleum, pharmaceuticals, and aircraft. On the import side, consumer goods products (mainly cell phones) have been growing at a substantial rate, but his is offset by major decreases in the import of crude oil and raw industrial products (commodity goods). This suggests that the American economy is becoming less dependent on foreign supplies of commodity products – particularly energy – which could lead to a strengthening dollar in the long term.
International trade is an important indicator, since net exports are accretive to GDP. The US consistently runs a trade deficit and this dampens overall growth; however, a substantial portion of the deficit is due to energy commodities, particularly crude oil. The reduction in crude imports is an unsung success story of the past few years. According to this report, crude imports have fallen steadily since the beginning of 2012, and exports – while volatile – have remained fairly stable. Crude oil accounts for about a third of the overall trade deficit, and as more oil and gas development takes place in the United States, this figure should continue to improve, leading to increased growth in the domestic economy.