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 December, the Census Bureau reported October exports of $197.5 billion and imports of $241.0 billion with a trade deficit of $43.4 billion, down just slightly from $43.6 billion in September. The goods deficit in October decreased slightly to $62.7 billion, and the services surplus was up at $19.2 billion. Based on a three-month moving average, the overall trade deficit rose in October to $42.4 billion well above the figure at the beginning of the year which was just $37.5 billion. Export sales have flattened as imports of both goods and services continue to rise rather dramatically in 2014 on a three-month moving average basis.
In spite of recent production developments in the US, and a tumbling price, petroleum continues to account for the bulk of the trade deficit, at 24.3 percent of the total in October. This is up dramatically from 22.3 percent of the deficit in the prior month, due to a large reduction in petroleum exports. The United States has a trade deficit with every region of the world save for Latin America and Africa, and a sustained and substantial deficit with most of the major economies in the world including China, Germany, Japan and India. Year to date, China accounts for about 46.8 percent of the overall deficit – and nearly 50 percent of the total deficit in October, which suggests that much of the buoyant Christmas retailing was spent on Chinese goods.
Looking across states in October the largest originators of US exports were Texas ($20.2 billion), California ($11.9 billion) and Virginia ($8.4 billion) which together accounted for a third of all US exports. At a detail level, the United States has a negative trade balance in nearly every product category save for agricultural and food products, minerals, fabrics and scrap, while maintaining significant positive balances in service categories and tourism. The continuing trade deficit will continue to put pressure on the dollar over time that cannot be masked by central banking policies. Firms will continue to be encouraged to keep foreign receipts abroad even without the negative effects of the corporate tax code.
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