–US re-Exports Fuel Oil, Autos; Gap W/ China -$23.1b, Japan -$6.5b
By Joseph Plocek
WASHINGTON (MNI) – U.S. December trade data will cut less from Q4
GDP than assumed, but full-year trade totals show the external sector
remains a big drag on growth as the U.S. continues to depend on foreign
sources of energy, automobiles, and cheaper consumer goods.
The December trade balance was -$48.8 billion after a revised
-$47.1 billion in November. In fact, all months in 2011 were revised but
the pattern of large deficits that narrowed slightly in the Fall
remains.
Imports advanced $3 billion, and exports rose a lesser $1.2 billion
in a rebound on the month.
Imports gained on a +$1 billion capital goods advance (mainly in
machinery and semiconductors), a +$0.5 billion rise in autos & parts,
and a $0.7 billion jump in pharmaceuticals. Industrial supply imports
posted just +$0.3 billion as crude rose $0.8 billion but fuel fell an
offsetting $0.8 billion.
The $227.6 billion in December imports were the highest since July
2008, illustrating economic recovery’s effect on demand.
The exports rise reflected +$1.1 billion in fuel oil and +$674
million in autos & parts, in other words re-exports of items that had
some value added. In fact, the Commerce Department noted that December
exports of petroleum were $10.6 billion, the highest on record. We find
this peculiar as on net the U.S. imports both energy and autos, but it
could reflect a return to normal in the supply chain after floods in
Southeast Asia disrupted deliveries.
Unadjusted trade gaps by country included: China at -$23.1 billion
after -$26.9 billion in November; Japan -$6.5 billion after -$6.2
billion; and OPEC -$9.1 billion after -$9.1 billion. The gap with
Germany was a new high -$4.8 billion after -$4.7 billion in November.
The data were a little better than the Commerce Department assumed
in Q4 GDP and will boost growth from the original estimate. However,
trade will not add to Q4 growth, just cut less. The real trade balance
averaged -$46.2 billion in Q4, compared to -$45.6 billion in Q3 after
monthly revisions that covered all of 2011.
For 2011, the trade deficit increased $8.3 billion over the year to
-$558 billion, as imports rose 11.3% but exports rose a lesser 9.0%.
About $378 billion of U.S. imports were oil-related and another $254
billion were autos and parts.
The services trade balance remains fairly steady at about +$15-1/2
billion a month. It was +$15.5 billion in December and +$179 billion for
all 2011.
The trade balance with China for all 2011 was -$295.5 billion and
with Japan it was -$62.6 billion. These countries represented the number
one and three sources of imports into the U.S. (Canada was number two
for imports, but their annual trade balance ran just -$35.6 billion.)
Starting with the January trade report, the Commerce Department
will improve the real trade data by seasonally adjusting additional
prices, will add names to country reporting, and will alter
classifications in some sub-categories of commodities.
The average price of imported crude oil was $104.13 a barrel in
December; with the spot price rising, this could advance next month.
Looking ahead, winter oil imports could jump as a result.
**Market News International Washington Bureau: (202)371-2121**
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