The December 2010 U.S. trade deficit increased $2.3 billion to $40.6 billion. $25.3 billion of this deficit is oil related. For the year, the trade deficit is -$497.8 billion, a trade deficit increase of -$122.9 billion, or 32.8% increase, in comparison to 2009. Oil related trade was -$265 billion of the total yearly 2010 deficit, or 53.2%. Imports increased 1.8 times faster than exports, with monthly increases of $2.8 billion for exports and imports $5.1 billion. The trade deficit with China hit a new record, -$273 billion for the year.
Imports were 1.25 times larger than exports for December.. In other words, for every dollar we export, we import $1.25 worth of stuff. For the year, the ratio is 1.27. This is on a Balance of Payments basis.
The United States basically has two major problems with the trade deficit, Chinese goods and Oil imports.
Below are imports vs. exports of goods and services from January 2007 to November 2010. Notice how much larger imports are than exports, but also notice the growth, or rate of change between months of U.S. exports.
Below is the list of good export increases from November to December. Industrial supplies includes oil and petroleum related products.
- Industrial supplies and materials: $1.1 billion
- Foods, feeds, and beverages: -$0.00 billion
- Automotive vehicles, parts, and engines: $0.6 billion
- Capital goods: $1.5 billion
- Cther goods: $0.2 billion
- Consumer goods: -$0.3 billion
Exhibit 7 gives Census accounting method breakdown for exports. Fuel oil was the biggest drop in exports, under the Industrial supplies category, -$892 million. Foods was basically unchanged with a -$477 million drop in soybeans. This numbers are seasonally adjusted. Capital goods exports the largest contributor was industrial machines and consumer goods had a -$362 million drop in pharmaceutical preparations.
Here are the goods import monthly changes:
- Industrial supplies and materials: $5.2 billion
- Capital goods: -$0.47 billion
- Foods, feeds, and beverages: $0.19 billion
- Automotive vehicles, parts, and engines: $0.15 billion
- Consumer goods: -$0.39 billion
- Other goods: $0.3 billion
The above are seasonally adjusted. Crude oil imports increased $3,269 billion for December, petroleum other, $551 million, fuel oil, $426 million. Clearly rising oil prices caused an increase in the trade deficit. Of interest is imports in pharmaceutical preparations increase $627 million. Do we have another industry being offshore outsourced?
On services, they were essentially unchanged:
Exports of services were virtually unchanged at $46.4 billion, and imports of services were virtually unchanged at $33.4 billion.
Advanced technology products trade deficit improved from
Advanced technology products exports were $26.1 billion in December and imports were $31.6 billion, resulting in a deficit of $5.5 billion. December exports were $3.0 billion more than the $23.1 billion in November, while December
imports were $2.8 billion less than the $34.4 billion in November.
Here is the breakdown with major trading partners, not seasonally adjusted. China is the worst trade deficit, with $20.7 billion, yet a huge drop from last month's $25.6 billion trade deficit with China. Oil, and it seems December is all about oil, has reared it's ugly head with with another OPEC trade deficit increase of $1.3 billion dollars. The unit price for December was $79.78 a barrel. Right now it's $85.64 a barrel, so expect to see more soaring deficits due to Petroleum imports.
OPEC, where the trade deficit is primarily oil, doesn't even compare to the trade deficit with China. Yet last month the ratio of China to OPEC by trade deficit amounts was 3.66, this month, the ratio dropped to 2.5. These are not seasonally adjusted, but still amazing.
The December figures show surpluses, in billions of dollars, with Hong Kong $2.2 ($1.9 for November), Singapore $1.3 ($0.5), Australia $1.2 ($1.2), and Egypt $0.7 ($0.4). Deficits were recorded, in billions of dollars, with China $20.7($25.6), OPEC $8.3 ($7.0), European Union $6.6 ($7.1), Japan $5.9 ($5.8), Mexico $4.7 ($5.6), Canada $3.9 ($1.7), Germany $3.3 ($3.1), Ireland $2.6 ($2.3), Nigeria $2.5 ($1.7), Venezuela $2.0 ($1.6), Korea $0.7 ($1.6), and Taiwan $0.6 ($0.8).
Below is the raw customs basis accounting of the trade deficit with China, not seasonally adjusted. China alone is 41.9% of the goods trade deficit for December. If one takes out not seasonally adjusted petroleum and oil (-$23 billion monthly deficit by NAICS), where only thousands of dollars of oil are imports from China, China becomes a whopping 78% of the total goods trade deficit. Take this calculation as very rough, but it shows, even with soaring oil imports and a drop in the monthly not seasonally adjusted numbers, how much China affects the United States. To accurately estimate this percentage one needs finer granularity of the data than what is available in the trade report, still it gives a good feel for how important China imports levels are to the U.S. trade deficit. Below is the month by month China trade deficit (represented as positive amounts), chart.
Below is a graph of trade deficit with China, per year. This year was a record for a trade deficit with China.
November's trade deficit overall monthly change remained the same but there were minor revision. They are listed in the report. Here is Novembers's report (unrevised, although graphs are updated). Here is the BEA website for additional U.S. trade data.
You might ask what are these Census Basis versus Balance of Payment mentioned all over the place? The above mentions various accounting methods so we're comparing Apples to Apples and not mixing the fruit. The trade report in particular is difficult due to the mixing of these two accounting methods and additionally some data is seasonally adjusted and others are not. One cannot compare values from different accounting methods and have that comparison be valid.
In a nutshell, the Balance of Payments accounting method is where they make a bunch of adjustments to not count imports and exports twice, the military moving stuff around or miss some additions such as freight charges. The Census basis is more plain raw data the U.S. customs people hand over which is just the stuff crosses the border. The 2005 chain weighted stuff means it was overall modified for a price increase/decrease adjustment in order to remove inflation and deflation time variance stuff.
Bottom line, you want just the raw data of what's coming into the country and going out, it's the Census basis and additionally the details are only reported in that accounting format.