–Monthly Trade Deficit Highest Since October 2008

By Chris Cermak

WASHINGTON (MNI) The U.S. January trade balance was much worse
than expected as a strong rise in imports, led by automotive gains,
eclipsed a smaller increase in exports over the month, the Commerce
Department reported data Friday.

The trade deficit widened to $52.6 billion, the highest since
October 2008, against expectations of $48.5 billion in MNI’s survey.
That compares to an upwardly revised $50.4 billion deficit in December
(originally reported $48.8 billion), and $47.5 billion deficit in
January 2011.

The three month moving average shows a deficit of $50.2 billion, up
from a $47 billion deficit for the three months ending in December.

Annual revisions in the January report put the total 2011 trade
deficit at $560.0 billion (revised up from $558.0 billion).

January imports rose $4.7 billion to a record $233.4 billion and
exports were up $2.6 billion to $180.8 billion. The goods deficit rose
$2.4 billion to $67.5 billion while the services surplus rose $0.3
billion to $14.9 billion.

Imports were pushed up by a $2.4 billion surge in automotive
vehicles and parts, likely due to some ongoing adjustments after last
year’s supply disruptions in Asia; and a $1.1 billion rise in industrial
supplies, including gains of $0.6 billion in both fuel oil and petroleum
products.

Exports were helped by a $1.3 billion increase in capital goods and
a $1.1 billion rise in automotive vehicles and parts that was partially
offset by a $1.2 billion drop in fuel oil.

Services exports were the highest on record at $52.2 billion, but
services imports also posted at record at $37.3 billion.

Trade deficits (not seasonally adjusted) widened with China to $26
billion deficit (December $23.1 billion), and OPEC to $10 billion
(December $9.1 billion); but narrowed with Japan to $6.2 billion
(December $6.5 billion), and the European Union to $8.5 billion ($9.6
billion December).

The trade deficit is on a pace to subtract from GDP growth in the
first quarter of 2012. The real trade balance rose to a deficit of $49.1
billion in January from an upwardly revised Q4 2011 average of $47.0
billion (revised from $46.2 billion).

–Chris Cermak is a Washington reporter with Need to Know News

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: MAUDS$,M$U$$$]