"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Tuesday, July 12, 2011

US International Trade In Goods And Services, May 2011

"International Trade" is, in this context, the technical term for the US trade deficit[1].  Analysts really like to look at this figure, because trade deficits are directly subtracted from GDP.  If the deficit shrinks, there is joy all around.  If it expands, despair.
April's results were surprisingly good, showing the trade deficit narrowing to $43.7 billion - beating expectations $5.3 billion.  Most of it was driven by increases in exports in industrial supplies and materials, and in capital goods, and by a decrease in imports of automotive vehicles and supplies and of industrial supplies.  The Econoday-surveyed analysts are feeling more optimistic for May, and are looking for a further $1 billion drop to a trade deficit of $42.7 billion.
For the details, we turn to a joint release by the US Census Bureau and the US Bureau of Economic Analysis.  A joint release that puts the boot in, so to speak, on that optimism.  Far from declining $1 billion, it ballooned $6.5 billion to a $50.2 billion deficit.  This was driven by a decrease in industrial supplies and materials exports and by an increase in imports of industrial supplies and goods and of capital goods.
[1]  Technically, it's the measure of whether we have a surplus or a deficit, and how much of one or the other we have.  But really.  We haven't run a trade surplus since 1975.  So why pretend?

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