US Trade Gap Narrows More Than Expected


The trade deficit in the United States narrowed to USD 51.1 billion in January of 2019 from an upwardly revised USD 59.9 billion in the previous month, which was the largest since October 2008. It compares with market expectations of a USD 57 billion shortfall. Exports rebounded, mainly due to soybeans and motor vehicles and parts and imports were the lowest since June 2018.

Total exports went up 0.9 percent month-over-month to USD 207.34 billion, following a 1.9 percent drop in December. Exports of goods increased USD 1.8 billion to USD 137.4 billion, mainly due to foods, feeds, and beverages (USD 1.3 billion); soybeans (USD 0.9 billion); automotive vehicles, parts, and engines (USD 1.2 billion); and passenger cars (USD 0.7 billion). On the other hand, sales went down for capital goods (USD -0.8 billion) and civilian aircraft (USD -1.3 billion). Exports of services increased USD 0.2 billion to USD 70.0 billion: other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services went up USD 0.1 billion and transport rose USD 0.1 billion.
 
According to unadjusted data, exports rose to Canada (1.3 percent), Mexico (12.7 percent), the EU (7 percent) and Brazil (5.3 percent) but fell for China (-22.3 percent to the lowest value since September of 2010), Japan (-5.6 percent) and OPEC (-26.2 percent).
 
Total imports dropped 2.6 percent month-over-month to USD 258.49 billion, the lowest level since last June, following a 2.1 percent rise in December. Imports of goods decreased USD 6.5 billion to USD 210.7 billion, mainly due to purchases of capital goods (USD -3 billion); computer accessories (USD -0.9 billion); semiconductors (USD -0.7 billion); civilian aircraft (USD -0.7 billion); industrial supplies and materials (USD -2.3 billion); and crude oil (USD -1.4 billion). Imports of services went down USD 0.3 billion to USD 47.8 billion: transport declined USD 0.2 billion and travel (for all purposes including education) dropped USD 0.2 billion. Other business services increased USD 0.1 billion.
 
According to unadjusted data, imports went down from China (-9.6 percent), Canada (-1.5 percent), the EU (-3.8 percent), Japan (-6.7 percent) and OPEC (-8.6 percent) but rose from Mexico (2 percent) and Brazil (4.3 percent).
 
The goods deficit with China declined to USD 34.5 billion from USD 36.8 billion in December. The trade gap also narrowed with the EU (USD -11.7 billion from USD -15.1 billion), Mexico (USD -5.8 billion from USD -7.7 billion), Japan (USD -5.2 billion from USD -5.7 billion) and Canada (USD -0.8 billion from USD -1.4 billion) but widened with OPEC (USD -1.3 billion from USD -0.3 billion).
 
In 2018, the goods and services deficit increased 12.5 percent to a 10 year high of USD 621 billion.


US Trade Gap Narrows More Than Expected


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
3/27/2019 2:18:17 PM