–US Civ Aircraft Exports -$387M; China NSA Bal -$25.5B

By Joseph Plocek

WASHINGTON (MNI) – The U.S. October trade data surprised for a
second month, suggesting better exports and a greater contribution to
GDP growth than most analysts had expected.

The October trade balance printed a better-than-expected -$38.7
billion, its lowest gap since January and compared with -$44.6 billion
in September. The median estimate in a Market News poll of economists
was for a -$44 billion print.

Imports fell $0.9 billion and exports advanced $4.9 billion to a
high since August 2008. This is a second favorable monthly report in a
row, after the trade gap started narrowing in September.

In imports, a $2.3 billion decline in crude oil, due to lower
volumes, was partly offset by +$1.3 billion in consumer goods
where pharmaceuticals, apparel, gems, and toys advanced. Imports of
computers and civilian aircraft fell substantially, and even imports of
autos fell $21 million.

The October oil deficit was -$19.1 billion, its lowest since -$18
billion in October 2009. It is curious that this particular month
contracts — there might be some residual seasonality in the data.

The exports gain was broad-based and reflected +$1.6 billion in
total for oil-related, +$735 million in foods to new record levels,
+$430 million in autos, and lesser gains in equipment. Exports to
Mexico, the EU, and China were the highest on record.

Unadjusted trade balances by country included: with China -$25.5
billion after -$27.8 billion in September, Japan -$5.7 billion after
-$5 billion, and OPEC -$5.7 billion after -$8.9 billion. These data
continue to show Asia and oil remain problems.

October’s real goods trade balance stands $4.6 billion narrower
than the Q3 average, suggesting perhaps as much as a 0.5 point boost to
GDP if sustained. More likely the boost will be less as November’s
trade balance retraces some of this favorable composition. Oil prices
are higher, and exports are unlikely to continue to outpace imports as
the U.S. recovery gains momentum.

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

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