USA: International trade

  • The US trade deficit widened sharply in January to $46.3bn. Higher oil prices accounted for only a small part of the deficit increase
  • Over the past couple of months, both real exports and real imports grew very strongly
  • This strength in both foreign and domestic demand indicates robust economic growth

The US trade deficit (trade of goods and services) widened sharply to $46.3bn in January from 40.3bn in December, well above consensus expectations ($41.5bn). The widening – following quite some narrowing between June and November last year – was due only for a small part to higher nominal oil imports. Excluding petroleum products, the trade deficit actually also widened substantially from $14.8bn in December to $19.7 in January (see chart below).

Nominal exports grew by a strong 2.7% m-o-m in January (following +1.9% in December), but imports jumped up by an even stronger 5.2% m-o-m, following a strong increase of 2.6% in December. Between Q4 2010 and January, nominal exports grew at a very strong 29.2% annualised, following +18.9% q-o-q in Q4. However, during the same period, imports surged by a massive 52.0% annualised, following +3.1% q-o-q in Q4. It’s worth noting that in January 2011 nominal exports topped the peak reached at the height of the preceding cycle in July 2008.

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