• 4 hours Russian Central Bank Eyes Gold-Backed Crypto
  • 10 hours Alberta’s Unlikely Alliance With The Nuclear Industry
  • 1 day The True Cost Of Opportunity In America
  • 1 day Why Investors Shouldn't Ignore Gold Stocks
  • 2 days Facebook Scrubs Over 2 Billion Fake Accounts
  • 2 days Dow Scrambles To Avoid Fifth Straight Weekly Loss
  • 3 days Is This The World’s First Truly Democratic Stock Exchange?
  • 3 days India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 3 days First Quarter Profits Slip For World's Top Oil Companies
  • 4 days The Yuan May Be China's Biggest Weakness
  • 4 days Hedge Funds Having A Banner Year
  • 4 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 4 days BHP Turns Bullish On EVs
  • 5 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 5 days The $90M Inflatable Rabbit Redefining Modern Art
  • 5 days Huawei’s Fate In The Air
  • 5 days Tesla Slashes Prices Again
  • 6 days The Modern History Of Financial Entropy
  • 6 days Italy’s Central Bank Embraces Sustainable Investing
  • 6 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

  1. Home
  2. Markets
  3. Other

Trade Deficit Rises as Exports Unexpectedly Plunge 2.1%

Exports unexpectedly declined a sizable 2.1 percent in February. Imports fell 1.3 percent. As a result, the trade deficit widened to -45.7 billion.

Last month, the trade deficit initially came in at -43.4 billion, but revisions increased the reported deficit to -44.7 billion.

Across the board, numbers are much weaker than expected. This is the fourth straight month of falling exports.

Economists missed this report by a mile. The Econoday Consensus estimate was a trade deficit of -43.9 billion.

Highlights

January was a weak month for cross-border trade with exports down a steep 2.1 percent and imports down 1.3 percent, making for a wider-than-expected trade imbalance of $45.7 billion. Exports of capital goods were especially weak as were imports of capital goods, both pointing to weakness in global business investment. Exports of industrial supplies were also down as were exports of consumer goods and also food products. Imports of industrial supplies were also down as were imports of consumer goods. Imports of autos, however, continue to rise to underscore the ongoing strength in vehicle sales.

The goods gap widened to $63.7 billion from $62.6 billion and when excluding petroleum where the gap narrowed, the goods gap widened to $57.8 billion from $55.5 billion. The nation continues to run a strong surplus on services, at $18.0 billion for a small gain in the month.

The gap with China widened in the month to $28.9 billion for a $1 billion increase while the gap with Europe narrowed sharply, to $8.8 billion from $13.7 billion. The gap with Japan narrowed to $4.9 billion from $6.6 billion while the gap with Canada widened to $2.4 billion from $2.2 billion.

Today's report will lower early estimates for first-quarter GDP and no less importantly is the latest indication that global traffic is stalling, which is not a plus for global policy efforts to raise inflation.

Recent History

The nation's trade deficit is expected to widen slightly to $43.9 billion in January vs December's $43.0 billion. Weak global demand has been hurting exports while imports, in a sign of domestic weakness and despite strength in the dollar, have been flat. Last week's advanced data on January showed a narrowing in the goods deficit, down 1.2 percent to $62.2.


Exports Hit Five-and-a-Half Year Low

Reuters has additional details in its report U.S. Trade Deficit Widens as Exports Hit Five-and-a-Half-Year Low.

  • In January, exports of goods fell 3.3 percent to $116.9 billion, the lowest level since November 2010.
  • Overall exports of goods and services dropped 2.1 percent to their lowest level since June 2011.
  • Food exports were the weakest since September 2010.
  • Industrial supplies and materials exports fell to their lowest level since March 2010.
  • Petroleum exports touched their lowest level since September 2010.
  • Exports of non-petroleum products were the weakest since February 2011. Exports to the United States' main trading partners fell broadly in January.
  • Imports of goods fell 1.6 percent to $180.6 billion, the lowest level since February 2011. Import growth is being constrained by ongoing efforts by businesses to reduce a stockpile of unsold merchandise.
  • Automobile imports were the highest on record.


Rapidly Cooling Global Activity

US exports shrinking is consistent with a rapidly cooling global economy. Here are some additional links on the slowing global economy.

Those who think the US will decouple from the global economy are mistaken.

 

Back to homepage

Leave a comment

Leave a comment