Today’s release fills out the first quarter data on U.S. international trade, so let’s focus on the first quarter data compared to the last quarter of 2010. What we said last month holds especially true now: 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.
The bottom line of the monthly analysis is that exports surged in March, reflecting increases across several categories; but imports increased even more, with oil being the largest contributor to the increase (see the pretty chart below). Here’s a teaser: Just how much has oil cost every American over the past quarter? Hold that thought and read on…
Looking at the first quarter of 2011 compared to the last quarter of 2010:
- Imports increased $46.8 billion (7.8 percent, 35.2 percent at an annual rate).
- Exports increased $23.0 billion (4.8 percent, 20.5 percent at an annual rate).
- The trade deficit increased $23.9 billion (20.4 percent, 110.4 percent at an annual rate).
What drove the increase in imports? The easy and predictable answer would be oil, especially given the chart above. But, is that the correct answer? What about consumer goods, and stuff like the iPad and motor vehicles, which saw an increase in sales in the first quarter? I'm trying to plant a seed of doubt here, but yes, the correct answer is petroleum. Oil accounted for $23.3 billion of the $46.8 billion increase in imports, primarily due to higher prices - again, we have little to no control over oil prices, so our continued reliance on foreign oil baffles me, the President, and pretty much anyone else tired of shipping hundreds of billions of dollars every year. That's why the administration continues to make investments in clean energy and take steps to ensure the American people don't fall victim to skyrocketing gas prices.
In the first quarter alone, the average American spent - cough, cough - $347 on imported oil. $347! And that’s just in the first quarter of 2011. If prices remain at this level (we don't know what will happen to oil prices, but by simply doing the math based on current prices), that means the average American will spend well over $1,000 on imported oil this year alone. In case anyone needed further justification to support the President's commitment to exploring alternative, cleaner energy sources and weaning us off foreign oil, there it is.
But what about exports? Exports increased in various categories in March and over the first quarter. What’s nice about this month's data is that sometimes a single category can skew numbers, such as aircraft or pharmaceutical preparations, but that wasn’t the case this time around. If you recall, exports hit a growth spurt late last year, so the solid export growth so far this year signals we're on track to achieve the President's National Export Initiative goals- supporting job creation and further economic expansion.
~Mark Doms, Chief Economist, U.S. Department of Commerce
May 11, 2011
