Friday, January 13, 2012

Oil slickens the deficit path for US trade as exports drop

US trade deficit surges on OIL
…erodes without it

The trade deficit in November widened sharply from $43.2bln to $47.7bln. This one month $.4.5blm widening will knock something off GDP unless it comes back to us as inventory gains, which ahs been a common occurrence.

Exports fell by 1.2% in Nov while imports rose by 1.3%. Excluding petroleum exports fell by 1.2% and imports snaked up by 0.1% making the point that with or without oil the trade deficit got worse. 

With this report the ebullience of exports is thrown into question as three-month  export growth is now negative and exports are in a clear downward path of deceleration with growth rates of 10.3% over 12-months, 2.4% over six-months and -0.5% over three-months. The global growth slowing is hitting the US. Meanwhile, the US growth acceleration is boosting imports whose growth is 12.7% over 12-months and fell to -0.6% over six months but has sprung back to 4% over three-months. 

Landed oil prices rose by 3.7% in the month as the volume of imports surged by 4.5% a lethal combination for the deficit. The non-petroleum deficit worsened by about $1.5bln.