Future of Energy Independence, Fueling Shrinking Trade Deficit, Now Uncertain
Washington, D.C. (PPD) — The U.S. trade deficit for goods and services narrowed to $39.9 billion in January, down another $5.5 billion from $45.5 billion in January. That’s the lowest trade deficit in the balance since September 1, 2016, when it was $39.0 billion.
The first trade balance report for 2020 beat the forecast after 2019 posted the first annual decline since 2013. This month marks the third straight decline.
Forecasts for the trade deficit ranged from a low of $46.0 billion to a high of $38.2 billion. The consensus forecast was $39.5 billion.
Exports, Imports, and Balance
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced exports in February fell far less than imports. Exports came in at $207.5 billion, a decline of $0.8 billion. Imports were $247.5 billion, down $6.3 billion.
The decrease in the overall goods and services deficit reflected a decrease in the goods deficit of $5.9 billion to $61.2 billion and a decrease in the services surplus of $0.4 billion to $21.3 billion.
The goods and services deficit has fallen $19.7 billion, or 18.7%, from February 2019. Exports have gained $1.1 billion or 0.3 %. Imports have declined $18.6 billion or 3.6%.
Three‐Month Moving Averages
The three-month average goods and services deficit decreased $1.3 billion to $44.7 billion for the period ending February 2020. Average exports rose $0.1 billion to $208.4 billion, while average imports fell $1.3 billion to $253.1 billion.
Year‐over‐year, the three-month average goods and services deficit ending in February 2019 fell $10.6 billion. Average exports rose $1.6 billion and average imports fell $9.0 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 was 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.
However, this report doesn’t cover the impact from mitigation efforts known as social distancing in response to the Chinese Coronavirus (COVID-19). Coupled with historically low crude oil prices, the future of small businesses behind U.S. energy independence is very much in doubt.