December US trade deficit widens, exports decline

The December US trade deficit widened to $38.7 billion, compared to $34.6 billion in November, says the Bureau of Economic Analysis, part of the US Department of Commerce.

This was due to a fall in exports, which at $191.3 billion in December were $3.5 billion less than in November.

December imports increased by $0.6 billion to $230 billion, compared to the previous month. The trade deficit for the whole of 2013 declined to $471.5 billion, the lowest since 2009, from $534.7 billion the year before.

As emerging markets, especially China, see their growth rates slowing down, economists wonder whether the US can maintain healthy exports growth.

Personal expenditure (consumer demand) is strengthening, which will likely draw in more imports, further widening the US trade deficit, many experts believe.

However, a smaller petroleum trade deficit may help narrow the trade deficit further this year. In an interview with Bloomberg News, Ryan Wang, an HSBC Securities economist, said “The trade deficit will continue to narrow a bit over the course of 2014, mostly thanks to a smaller petroleum trade deficit. We’ll see another year of moderate growth.”

US December goods deficit

The December goods deficit grew to $58.8 billion, $4.6 billion higher than the month before. Goods exports dropped by $4.3 billion to $132.8 billion, while the imports of goods rose by $0.3 billion to $191.6 billion. Below is a list of exported goods in December, compared to November:

  • Industrial supplies and materials, $1.1 billion decrease.
  • Capital goods, $1.1 billion decrease.
  • Other goods, $0.9 billion decrease.
  • Automotive vehicle parts and engines, $0.8 billion decrease.
  • Consumer goods, $0.7 billion decrease.
  • Foods, feeds and beverages, $0.4 billion increase.

Below is a list of imported goods in December, compared to November:

  • Consumer goods, $0.7 billion increase.
  • Industrial supplies and materials, $0.5 billion increase.
  • Other goods, $0.3 billion increase.
  • Automotive vehicles, parts, and engines, $0.9 billion decrease.
  • Capital goods, $0.3 billion decrease.
  • Foods, feeds, and beverages, $0.1 billion decrease.

Below is a list of exports of goods comparing December 2013 with December 2012:

  • Foods, feeds, and beverages, $1.8 billion increase.
  • Capital goods, $0.4 billion increase.
  • Automotive vehicles, parts, engines, $0.2 billion increase.
  • Consumer goods, $0.1 billion increase.
  • Supplies and materials, $1.5 billion decrease.
  • Other goods, $0.9 billion decrease.

Below is a list of imports of goods comparing December 2013 with December 2012:

  • Capital goods, $1.7 billion increase.
  • Automotive vehicles, parts, and engines, $1.3 billion increase.
  • Consumer goods, $1.0 billion increase.
  • Other goods, $0.3 billion increase.
  • Foods, feeds, and beverages, $0.2 billion increase.
  • Industrial supplies and materials, $2.9 billion decrease.

US December services surplus

Services registered a surplus of $20.1 billion, an increase of $0.4 billion compared to November. Services exports reached $58.5 billion, or $0.8 billion more than in November, while services imports rose $0.3 billion to $38.4 billion. Below is a list of exported services in December, compared to November:

  • Travel in passenger fares, $0.2 billion increase.
  • Travel in other transportation, which includes freight and port service, $0.1 billion increase.

Other categories either had no change or changes deemed not to be statistically significant. Increases in imported services were seen in travel, with passenger fares rising by $0.2 billion and other transportation decreasing by $0.2 billion in December compared to the previous month.

Other services imports did not change significantly during the month. Comparing December 2013 to December 2012, services exports rose by $1.5 billion (4.5%), mainly driven by travel ($1.3 billion), royalties and license fees (0.6 billion) and passenger fares ($0.4 billion).

Comparing December 2013 to December 2012, services imports rose by $1.3 billion (3.5%), driven mainly by an increase in travel ($0.7 billion), in passenger fares ($0.6 billion), and in other transportation ($0.2 billion), and direct defense expenditures ($0.2 billion).

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