Among the slew of data that accompanies the U.S. Census Bureau’s release of April export and import data on Thursday, three items deserve special attention.
First, we want to see how the surge in exports that began last fall has been doing. Keep in mind that exports surged last month, a lot, so we will restate our mantra to take a longer view rather than getting caught up in month-to-month wiggles. With that said, exports have posted strong gains since last fall. Why do we care? As we explained last month [3], strong export growth has boosted a number of heavy manufacturing industries, and employment in May in these industries increased as well.
Second, the price of oil rose in April, which may mean our monthly petroleum import bill will climb further. The number of barrels of oil imported each month bop around some, though, so we‘ll have to wait and see. The figure below shows that our trade deficit in petroleum products (oil and other oil-related products such as liquefied petroleum gases) has represented more than half of our total trade deficit recently, and that this share tends to rise as oil prices climb (In fact, our trade deficit in all other goods and services in the first quarter of 2011 increased only slightly compared to the fourth quarter of 2010, and is below the average for all of 2010. This tells us that petroleum by itself is driving most of the first quarter’s $24 billion surge in the trade deficit.). We’ll update this figure on Thursday. Mitigating this slightly is the fact that oil prices eased a bit in May, declining about $10 a barrel from April. Lower oil prices may improve our trade deficit in the coming months.
Finally, the horrific events in Japan (the tsunami and subsequent nuclear reactor-related issues) may affect our imports from Japan in April. Although the events happened in March, there were enough goods in the pipeline that the trade effects were not yet noticeable in that month’s data. We will be particularly interested in whether the data back up the anecdotal stories of shortages in motor vehicles and parts, and whether our other main imports from Japan – machinery, computers and electronics, and chemicals – have been similarly affected. Previously, our imports from Japan in all these major categories have been rising since the end of the recession. The United States has recorded roughly $4 billion worth of imports each month in motor vehicles and parts, and $3.5 billion in machinery, computer and electronic products combined.
Prior to the crisis, total imports from Japan during the first three months of this year had risen 19% over the same period last year. For all of 2010, we imported about $120 billion from Japan, our fourth largest import partner behind Canada, Mexico, and China.
Though normal month-to-month movements can be up or down, any large drop in these figures may reflect production and transportation issues resulting from the tsunami. We’ll report more on this on Thursday.
~Mark Doms, Chief Economist, U.S. Department of Commerce
June 8, 2011
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