U.S. Trade Deficit Widens in January
Economics / US Economy Mar 11, 2011 - 03:07 AM GMTThe trade deficit of the U.S. economy widened to $46.3 billion in January from $40.3 billion in the prior month. Exports of goods and services advanced 2.7% in January, while imports of goods and services also grew 5.2%. Imports of both petroleum (+3.7%) and non-petroleum products (+4.2%) items rose in January. If this trend continues in February and March, the trade deficit would cutback real GDP growth noticeably.
Trade disruptions related to the Chinese New Year usually affect trade deficit numbers in February and result in a smaller trade gap vis-à-vis China and reduce the total trade deficit for the United States. If this event is repeated in 2011, the trade deficit may not be a large drag as it stands now.
In January, imports (+13.7%) and exports of autos (+13.3%) posted sharp increases. With regard to the trade deficit vis-à-vis individual countries, the trade deficit widened vis-à-vis China, held steady vis-à-vis Euro area but narrowed vis-à-vis Japan and Mexico.
The Pacific Rim nations (Australia, Japan, China, Hong Kong, Singapore, Indonesia, Malaysia, Korea, Taiwan, and Philippines) are the major export destinations of U.S. goods, followed by the Euro area and South/Central America.
Asha Bangalore — Senior Vice President and Economist
http://www.northerntrust.com
Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.
Copyright © 2011 Asha Bangalore
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
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