In February the US trade deficit enlarged by 3.4bln to 62.3bln dollars (chart 1). In the same period goods deficit edged up by 3.5bln to 72.9bln, in a monthly basis. Services surplus slightly came to 10.6bln.
Import of goods rose by 3.1% and reached 213.7bln m/m. Import volumes sharp increase was favored by motor vehicles and consumer goods. The latter’s import rose by 2.2bln due to 114% increase of pharmaceutical production. The import expansion of this product was not less impressive over year. Among the imported goods clothing and household goods showed notable increase. Despite the moderation of personal expenditure growth and the rise in gasoline prices the demand for foreign motor vehicles and parts was high, which increased import by 1.8bln. Capital goods also had an upward pressure on import, the demand of which rose by 1bln, mainly thanks to industrial machines and computer accessories. These increases were partially offset by 9.1% decrease of computers import. Industrial materials and supplies as well as food increased import to the US slightly.
Goods export was 2% higher on a monthly basis. Excluding capital and consumer goods all other components of exported goods had a positive dynamics. The main contributors to the growth were industrial materials and supplies, the export of which rose by 1.9bln in a monthly basis. The main positive impact came from chemicals, fuel and gold. The sharp increase of gold price ensured significant gain of this product export both in a monthly and yearly basis. Food became another source of export growth. Corn and soybeans were in strong demand. During the last two months of this year wheat export doubled compared with the same period of last year. It was a result of its more than doubled prices. Capital goods producers reduced the volumes of export by 0.7bln. It was favored by a decrease of industrial machines, telecommunication equipment and civilian aircrafts export. In particular, Boeing Company delivered 22 new aircrafts to foreign airlines instead of 24 in January. Consumer goods export fell by 0.1bln, due to 17.1% decrease of antiques and artwork export. It was offset by a sharp rise of pharmaceuticals export both in a monthly and yearly basis.
Trade deficit with China narrowed by 9.6% to 18.4bln. It was provoked by import decrease from China for more than 2bln. Export of goods to China slightly changed and remained within 5.8bln. Despite the record high oil prices OPEC countries also contributed to the deficit reduction. Export from Africa and Latin America, which mainly supplied precious and nonferrous metals to the US, significantly fell. Net export with the Euro Area marginally decreased compared with the prior month, after a strong drop down of the US goods deficit with Euro Area (chart 2).
Oil and petroleum, as well as precious metals, remain on record high levels, because of the rapid escalation of relations between Iran and Western countries, perpetual acts of terrorism in Iraq and recognition of Kosovo’s independence. Positive impact of these political factors, which are pushing up higher energy prices, may be partially or fully offset by deceleration of the US economic growth. Low labor cost in emerging countries favors in its turn import growth in the US.
Among the factors which can narrow goods deficit we underline the US dollar weakness and emerging countries robust economic growth. However, positive impact of weak dollar on trade balance will be only short or at least medium term. In long term, on condition oil and natural gas prices increase gradually, trade deficit will enlarge.
US ECONOMIC INDICATORS
Chart 1
Source: Bureau of Economic Analysis
Chart 2
Source: Bureau of Economic Analysis
