09:05 US ECON: Trade Deficit Improves to $56.47 bln in Sep Washington,
November 13.
* Headline trade balance is lowest in 11 months.
* Previous was $59.08 bln, revised from $59.14 bln.
* Reuters consensus was -$57.00 bln
* Record large fall in imports; export decline second only to Sep 2001
* Record plunge in price of imported crude oil
* Real trade balance (-$42.06 bln) is worst in four months; GDP implications
The Commerce Department reported a $56.47 bln trade deficit in September,
down 4.4% from August’s $59.08 bln trade gap and the lowest level since October
2007. Falling oil prices and lower global demand pushed exports and imports to
record month-ago declines. The US imported 253.3 mln barrels of crude oil in
September, the lowest level since February 2003. The average price per barrel
plunged a record $12.41 to $107.58, the lowest level since May.
US goods and services imports fell a record 5.6% to $211.9 bln. The $12.5
bln drop is also a record decline in dollar terms. Goods and services exports
fell 6.0% to $155.4 bln, the largest percentage decline in seven years and a
record drop — $9.9 bln — in dollar terms. What kept our $58.1 bln estimate
from being realized was the 9.6% jump in the services surplus to a record $13.13
bln.
Demand for Chinese imports continued to grow to record levels, as imports
rose to a record $33.1 bln, leaving the deficit at a record $27.8 bln. Imports
from China typically peak in October, not September, to ship in time for
Christmas but this year may be the exception as retailers wanted to get a jump
on holiday toy sales before economic conditions worsened.
The news was not as comforting in real terms. The real trade deficit (on a
Census basis) blew out nearly seven percent to $42.06 bln, the widest gap in
four months. The non-petroleum real deficit ($37.72 bln) was the worst in four
months as well. Real exports fell 7.8% but real imports fell only 3.6%. That’s
going to have negative implications for Q3 GDP revisions and we believe the
trade equation alone may push Q3 GDP to a decline of 0.5% AR versus the -0.3%
previously reported. Revised Q3 GDP (the preliminary estimate) posts on
November 26.
Census-based, unadjusted data show the OPEC deficit fell 30% between August
and September, last at $13.36 bln or the lowest since February and nearly 45%
less than the July record when oil prices peaked. Given that oil has crashed
through $60/bbl in November, we expect the deficit with OPEC to finish the year
at an 18-month low. That should also soothe the deficit with Canada, as it too
peaked in July along with oil prices. The real non-petroleum deficit hit a 69-
month low in July 2008 ($33.01 bln) but has since risen 14.2%.
Sep-08 Aug-08 Jul-08 Jun-08 May-08
Trade Balance -56470 -59076 -61305 -58835 -60208
1mo Pct Chg -4.4% -3.6% 4.2% -2.3% -2.1%
Total Exports 155400 165279 168089 162788 156935
1mo Pct Chg -6.0%* -1.7% 3.3% 3.7% 1.2%
12mo Pct Chg 8.8% 16.3% 20.1% 19.9% 17.4%
Total Imports 211870 224355 229393 221624 217143
1mo Pct Chg -5.6%* -2.2% 3.5% 2.1% 0.2%
12mo Chg 6.9% 13.6% 16.3% 13.7% 12.4%
Goods -69598 -71058 -74116 -71267 -72111
1mo Pct Chg -2.1% -4.1% 4.0% -1.2% -1.2%
Services 13129 11983 12811 12432 11903
1mo Pct Chg 9.6% -6.5% 3.0% 4.4% 4.0%
By Country Sep-08 Aug-08 Jul-08 Jun-08 May-08
Canada - 9.9% -7784 -7539 -8243 -7233 -5385
Mexico - 8.6% -4940 -5880 -5456 -5690 -6575
Western Europe - 11.7% -8331 -6784 -11035 -8247 -7894
China - 29.8% -27766* -25334 -24877 -21430 -21049
Japan - 9.6% -5592 -4766 -6328 -6127 -5046
NICs -1.2% 178 650 198 2213 1049
OPEC - 24.8% -13355 -19199 -24184* -18098 -17942
Real Trade Balance Sep-08 Aug-08 Jul-08 Jun-08 May-08
Total -42057 -39411 -41194 -40492 -43970
Petroleum -8079 -7867 -9279 -8447 -8131
Non-Petroleum -37718 -36139 -33013 -34998 -39960
Residual 3740 4595 1098 2953 4121