Energy Independence Fueling Narrowing Trade Deficit
The U.S. trade deficit for goods and services narrowed to $45.3 billion in January, down another $3.3 billion from a downwardly revised $48.6 billion in December. The first trade balance report for 2020 beat the forecast after 2019 posted the first annual decline since 2013.
Forecasts ranged from a low of $-53.6 billion to a high of $-45.5 billion. The consensus forecast was $-46.1 billion.
Exports, Imports, and Balance
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced Friday exports in January fell far less than imports. Exports came in at $208.6 billion, a decline of $0.9 billion. Imports were $253.9 billion, a decline of $4.2 billion.
The decrease in the overall goods and services deficit reflected a decline in the goods deficit of $2.6 billion to $67.0 billion and an increase in the services surplus of $0.6 billion to $21.7 billion.
The goods and services deficit has fallen $8.5 billion, or 15.8%, from January 2019. Exports have gained $2.3 billion, or 1.1%. Imports have declined $6.2 billion, or 2.4%.
Three‐Month Moving Averages
The three-month average goods and services deficit decreased $0.7 billion to $45.9 billion for the period ending January 2020. Average exports rose $0.7 billion to $208.6 billion, while average imports fell less than $0.1 billion to $254.5 billion.
Year‐over‐year, the three-month average goods and services deficit ending in January 2019 fell $10.2 billion. Average exports rose $1.9 billion and average imports fell $8.2 billion.
U.S.-China Trade Deficits
The politically-sensitive trade deficit with China fell $7.9 billion to $69.4 billion in the fourth quarter (Q4) 2019. While exports fell $4.1 billion to $38.0 billion, imports fell $12.0 billion to $107.5 billion.
The trade in goods deficit with China fell $2.1 billion to $23.7 billion in January. Exports rose $0.2 billion to $7.7 billion and imports fell $1.8 billion to $31.4 billion.
Trade Balance By Nation
The Q4 2019 figures show surpluses, in billions of dollars, with South and Central America ($20.5), Brazil ($8.7), OPEC ($7.8), Hong Kong ($6.4), United Kingdom ($5.5), Singapore ($4.8), and Saudi Arabia ($3.6). Deficits were recorded, in billions of dollars, with China ($69.4), European Union ($26.9), Mexico ($25.5), Germany ($14.8), Japan ($11.3), Italy ($9.0), India ($6.7), Taiwan ($5.0), Canada ($3.9), France ($2.9), and South Korea ($1.6).
The U.S.-European Union trade deficit decreased $8.1 billion to $26.9 billion in Q4 2019. Exports rose $1.9 billion to $152.7 billion and imports declined $6.2 billion to $179.6 billion.
The U.S.-Canada trade deficit rose $1.9 billion to $3.9 billion in Q4 2019. Exports fell $1.6 billion to $88.2 billion, while imports rose $0.3 billion to $92.1 billion.
Energy Independence and the Narrowing Trade Deficit
As People’s Pundit Daily (PPD) previously reported, the U.S. trade deficit for goods and services declined 1.7% to $616.8 billion in 2019. It is the first annual decrease since 2013.
According to new annual data from the U.S. Census Bureau, the deficit decline in the international trade balance was driven by energy independence.
Crude oil exports soared 35.5% or $17.1 billion compared to the same period in 2018, while crude oil imports cratered 19.3% or $30.3 billion over the prior year.
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