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 February, the Census Bureau reported exports of $190.4 billion and imports of $232.7 billion with a trade deficit of $42.3 billion, up from $39.3 billion in January. This is the largest monthly trade deficit since September of 2013, and reflects the lowest level of exports since that same month. In spite of a bad February for American trade, the overall picture is fairly bright. Imports have been relatively flat over the past year or so, while exports have steadily risen. Even with the abnormally cold winter throughout North America, net petroleum imports have been about flat on a year over year basis. This figure had been falling for some time.
China and the European Union continue to be the areas with the largest trade imbalances with the United States, though the Chinese surplus is falling slowly. On the other hand, the deficit with the OPEC states is rising.
In general terms, international trade is a good thing, allowing consumers and businesses to access a more diverse, higher quality and less expensive market for products. However, the American economy has run substantial balance of payments deficits since 1975. These deficits peaked in 2006 and have been falling slowly ever since. Even so, the aggregate deficit – or the amount purchased from abroad less the amount sold to foreigners – over that period has been $9.5 trillion. This suggests that there is substantial room for improvement. The huge deficits are driven by higher oil prices and today, the United States is rapidly becoming a net gas exporter and may soon be a net energy exporter as well. Petroleum accounts for about a third of the trade deficit, and while an improved US energy sector will not eliminate the deficit it will go a long way toward helping.
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