As we have emphasized in the past, never put too much focus on a single month’s trade numbers, as the monthly wiggles can be largely influenced by a wide set of idiosyncratic factors, such as exports of aircraft, imports of oil, spikes in the trading of pharmaceuticals, seasonal adjustments, the date of the Chinese New Year (seriously, see below)…

Before delving into some of the more interesting "weeds" of today's trade numbers, the top line stats show that imports decreased $3.6 billion in February from January, exports decreased $2.4 billion, and the trade deficit improved by $1.2 billion. 

The February 2011 international trade deficit shrank 2.6%, to $45.8 billion. Exports declined 1.4%, to $165.1 billion. Imports fell 1.7%, to $210.9 billion.

us_international_trade_in_goods_and_services_february_2011.pdf

statement_by_secretary_locke_on_international_trade.pdf

The U.S. trade deficit in goods and services widened from $40.3 billion in December to $46.3 billion in January, a change that reflected a healthy increase in exports coupled with a really, really big increase in imports.  Let’s talk about exports first. Exports rose 2.7 percent in January (an increase of $4.4 billion), and reached an all-time record (in nominal terms). The January increase wasn’t driven by a single factor, instead many categories of exports increased (for instance, sometimes the changes in the monthly export numbers are driven by changes in civilian aircraft – in January, our exports of civilian aircraft actually decreased).

There are several reasons why today’s blog should be of great interest.  Last year, the petroleum-related trade deficit totaled $265 billion and accounted for 42 percent of our total deficit in goods.   To put this in more personal terms, $265 billion averages to about $850 for every woman, man and child in the U.S.  In 2008, when oil prices hit their all-time high, the petroleum-related deficit totaled $386 billion (over $1,260 for each person).  That’s a lot of money flowing out of the country for a commodity with a volatile price over which we have little control. 

Today’s release fills out the trade picture for 2010, and what a year it was from the foreign trade perspective: economic growth around the world was mixed (as the IMF recently put it, "Global Recovery Advances but Remains Uneven”), several commodity prices shot up, and some foreign exchange rates swung around (hello euro). 

Attached file: 

chart_exports_foriegngdp.pdf