Trade Gap Shows Little Change in January
The U.S. trade deficit showed little change in January and the levels of exports and imports suggested a cooling economy, government data showed Tuesday.
Increased imports of consumer goods and a record volume of imports of petroleum products helped widen the trade gap to $33.3 billion in January from $33.2 billion a month earlier, the Commerce Department said.
The rise in imports was the first in four months. Higher overseas shipments of semiconductors, machinery and other capital goods brought about the first increase in exports since August. Even with the monthly gains, the average value of imports and exports has declined since late last year.
Federal Reserve policy makers cited the slowing U.S. economy and “the potential for weakness in global economic conditions” in its decision to cut the benchmark interest rate by half a percentage point. At 5%, the target rate for overnight loans between banks is the lowest in 19 months.
With the slowdown eroding company earnings, businesses are less inclined to invest in productivity and consumers less inclined to spend, the statement from the Federal Open Market Committee said. Reinforcing that concern, the trade report showed a decline in imports of capital goods.
Imports rose 0.4% during January to $122.9 billion. The three-month moving average of imports, at $123 billion, was the lowest since $122 billion in August. Exports rose 0.5% for the month to $89.7 billion. The three-month average, at $89.9 billion, was the lowest since $89.4 billion in July.
In September, the trade deficit widened to a monthly record of $33.5 billion.
A jump in consumer spending in the first half of last year--along with the highest volume of oil and gas ever--caused imports to swell and widen the annual deficit to a record $369 billion.
“The underlying trend rate of growth in imports is clearly slowing,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, N.Y. “The problem is that exports are slowing too, hurt by the poor performance of economies overseas and the strong dollar.”
The trade numbers reflect consumption of a record volume of petroleum products, the equivalent of 415.5 million barrels, even as the price of oil dropped. Products include liquefied propane and butane gas as well as crude oil. The price of oil was $23.13 a barrel in January, the lowest since December 1999. Oil in December 2000 was $26.53.
Auto imports rose 1.6% in January after an 8.3% decline a month earlier.
Imports of other consumer goods rose 5.7% after falling 3.9% a month earlier. The January rise included the shift of wireless telephones from the business category to consumer goods. Still, phone imports declined.
U.S. imports of capital goods fell 4.9% in January, the third decline in four months. That included a 38% drop in civilian-aircraft imports after a 48.6% increase a month earlier. It also reflects a 7.7% drop in semiconductor imports after a 3% increase.
U.S. exports of capital goods excluding automobiles rose 3.2% in January, the first increase since August.
By region, the trade deficit with Japan narrowed to $5.9 billion in January, the lowest in a year. The shortfall with China widened to $7.2 billion for the month from $6.1 billion.
The deficit with Canada, the largest U.S. trading partner, widened to a record $5.8 billion. The deficit with Mexico widened to $2.1 billion.
The trade deficit with Asia’s newly industrialized countries widened to $2.6 billion. The deficit with Western Europe widened to $5.6 billion.
The deficit with the Organization of Petroleum Exporting Countries narrowed to $4.2 billion from $4.3 billion.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
U.S. Trade Deficit
The overall gap continues to reflect a deficit in the trade of goods and a surplus in services. Monthly balance in billions of dollars:
*
January: -$33.3 billion
Source: Commerce Department
