Commenter RJS, MarketWatch 666 on the Goods and Services Trade Deficit. International Trade in Goods and Services, March 5, 2021 Our trade deficit rose 1.9% in January, as both the value of our exports and our imports increased, but the value of our imports increased by more…the Commerce Dept report on our international trade in goods and services for January indicated that our seasonally adjusted goods and services trade deficit rose by a rounded .2 billion to a rounded .2 billion in January, from a December deficit that was revised from .6 billion to .0 billion….the value of our January exports rose by .8 billion to 1.9 billion as a .1 billion increase to 5.7 billion in our exports of goods was partly offset by a decrease
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Commenter RJS, MarketWatch 666 on the Goods and Services Trade Deficit.
International Trade in Goods and Services, March 5, 2021
Our trade deficit rose 1.9% in January, as both the value of our exports and our imports increased, but the value of our imports increased by more…the Commerce Dept report on our international trade in goods and services for January indicated that our seasonally adjusted goods and services trade deficit rose by a rounded $1.2 billion to a rounded $68.2 billion in January, from a December deficit that was revised from $66.6 billion to $67.0 billion….the value of our January exports rose by $1.8 billion to $191.9 billion as a $2.1 billion increase to $135.7 billion in our exports of goods was partly offset by a decrease of $0.3 billion to $56.3 billion in our exports of services, while our imports rose by $3.1 billion to $260.2 billion as a $3.4 billion increase to $221.1 billion in our imports of goods was partly offset by a $0.3 billion decrease to $39.0 billion in our imports of services…export prices averaged 2.5% higher in January, which means the relative real increase in exports for the month was less than the nominal increase by that percentage, while import prices averaged 1.4% higher, meaning the increase in real imports was smaller than the nominal dollar decrease reported here by that percentage……
The increase in our January exports of goods resulted from greater exports of industrial supplies and materials and of capital goods, which was partly offset by lower exports of soybeans, automotive parts, and consumer goods…referencing the Full Release and Tables for January (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials rose by $2,505 million to $45,999 million led by a $620 million increase in our exports of petroleum products other than fuel oil, a $355 million increase in our exports of plastic materials, and a $332 million increase in our exports of natural gas liquids, and that our exports of capital goods rose by $1,565 million to $41,570 million on a $527 million increase in our exports of industrial machines other than those itemized separately and a $404 million increase in our exports of civilian aircraft…partially offsetting the increases in those two end use categories, our exports of automotive vehicles, parts and engines fell by $660 million to $12,600 million on a $460 million decrease in our exports of parts and accessories other than engines, chassis, or tires, our exports of consumer goods decreased by $638 million to $16,032 million on a $309 million decrease in our exports of jewelry and a $255 million decrease in our exports of pharmaceuticals, our exports of foods, feeds and beverages fell by $538 million to $13,873 million on a $1123 million decrease in our exports of soybeans which was partly offset by a $417 million increase in our exports of corn, and our exports of other goods not categorized by end use fell by $160 million to $5,206 million…
Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our January goods imports and shows that the January increase in our imports was due to higher imports of pharmaceuticals, which in turn were partly offset by lower import of passenger cars…our imports of consumer goods increased by $3,739 million to $63,339 million as a $4,964 million increase in our imports of pharmaceutical preparations was partly offset by a $450 million decrease in our imports of of artwork, antiques and other collectibles, a $406 million decrease in our imports of apparel and textiles other than those of wool or cotton, and a $400 million decrease in our imports of toys, games, and sporting goods, while our imports of industrial supplies and materials rose by $691 million to $43,054 million as a $1,178 increase in our imports of crude oil and a $382 million increase in our imports of fuel oil were offset by a $775 million decrease in our imports of finished metal shapes…in addition, our imports of capital goods rose by $650 million to $59,549 million on a $341 million increase in our imports computers, and our imports of foods, feeds, and beverages rose by $832 million to $13,785 million on increases in our imports of most foods and feeds listed….partially offsetting the increases in those end use categories, our imports of automotive vehicles, parts and engines fell by $1561 million to $31,576 million on a $1,879 million decrease in our imports of passenger cars, and our imports of other goods not categorized by end use fell by $920 million to $8,554 million…
The Full Release and Tables pdf for this month’s report also summarizes Exhibit 19, which gives us surplus and deficit details on our goods trade with selected countries:
The January figures show surpluses, in billions of dollars, with South and Central America ($5.3), Hong Kong ($2.4), Brazil ($1.5), Saudi Arabia ($0.5), and United Kingdom ($0.5). Deficits were recorded, in billions of dollars, with China ($27.2), European Union ($20.1), Mexico ($11.9), Germany ($7.2), Japan ($5.2), Italy ($2.9), France ($2.3), India ($2.3), Taiwan ($2.1), Canada ($2.0), South Korea ($0.9), and Singapore ($0.1).
- The deficit with Mexico increased $1.6 billion to $11.9 billion in January. Exports increased $0.1 billion to $20.7 billion and imports increased $1.6 billion to $32.6 billion.
- The deficit with Germany increased $1.5 billion to $7.2 billion in January. Exports decreased $0.2 billion to $4.7 billion and imports increased $1.3 billion to $12.0 billion.
- The deficit with South Korea decreased $1.8 billion to $0.9 billion in January. Exports increased $1.3 billion to $5.7 billion and imports decreased $0.5 billion to $6.6 billion.
To gauge the impact of January trade on 1st quarter GDP growth figures, we use exhibit 10 in the pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted for inflation in chained 2012 dollars, the same inflation adjustment that’s used by the BEA to compute trade figures for GDP, with the only difference being that the amounts are not annualized here…from that table, we can figure that the 4th quarter’s real exports of goods averaged 145,373.7 million monthly in chained 2012 dollars, while inflation adjusted January goods exports were at 147,085 million in that same 2012 dollar quantity index representation… computing the annualized change between those two figures, we find that January’s real exports of goods are thus rising at a 4.79% annual rate from those of the 4th quarter, or at a pace that would add about 0.29 percentage points to 1st quarter GDP growth if continued through February and March…in a similar manner, we find that our 4th quarter real imports of goods averaged 239,602.7 million monthly in chained 2012 dollars, while inflation adjusted goods imports in January were at 243,571 million…that would indicate that so far in the 1st quarter, we have seen our real imports of goods increase at a 6.79% annual rate from those of the 4th quarter…since an increase in imports would subtract from GDP because it would represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, that increase at a 6.79% rate would subtract roughly 0.68 percentage points to 1st quarter GDP….hence, if our January trade in goods deficit is maintained at the same level throughout the 1st quarter, the deterioration in our balance of trade in goods would subtract about 0.39 percentage points from the growth of our 1st quarter GDP….while we have not computed the impact of the change in international trade in services here, we’d note that both exports and imports of services fell by $0.3 billion in January, so the impact of the month’s services trade on GDP should be minimal…
Also note that both exports and imports were revised from July through December to incorporate more comprehensive and updated quarterly and monthly data; in addition, seasonally adjusted data for all months in 2020 were revised so that the totals of the seasonally adjusted months equaled the annual totals…the obvious impact of these revisions will be to necessitate the revision of GDP figures for each quarter of 2020; however, for quarters other than the 4th, which still has another estimate due out at the end of the month, those GDP revisions will not take place until the annual GDP revisions, which are typically released near the end of July…