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| Commentary on the May 2001 Trade Figures |
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Tuesday, July 24th, 2001
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America�s monthly trade deficits (goods and services basis)
May 2001 $28.3 billion
April 2001 $32.0 billion
May 2000 $30.3 billion
May 1999 $20.9 billion
The deficit in May, at $28.3 billion, was the lowest since January of 2000. Unfortunately that is not very low. In fact even as recently as two years ago, a prediction that the deficit would reach such a level would have been considered absurdly alarmist. Remember that it was as recently as two years ago that the deficit passed the $20 billion level for the first time. And when the deficit hit a record $20.9 billion in May 1999, this was considered at the time to be a temporary, if disturbing, aberration that was attributable special circumstances. The most notable of these circumstances was that consumption was so much stronger in the U.S. than in the rest of the world (and particularly in East Asia, which was still in 1999 recovering from its financial crisis of 1997-98). Well, here we are today in the midst of the most painful American economic slowdown in a decade yet far from falling as most experts predicted, the deficits have ballooned to unheard of levels.
Suffice it to say that I am sticking with my forecast that the deficit for 2001 will total more than $350 billion � the second worst on record and fractionally less than 2000�s boom-year record.
I append below the official announcement of the latest deficit.
Goods and Services Deficit Decreases in May 2001
The Nation's international deficit in goods and services decreased to $28.3 billion in May, from $32.0 billion (revised) in April, as exports increased and imports decreased.
Goods and Services
* Exports increased to $87.7 billion from $86.9 billion in April. Goods were $62.8 billion in May, up from $62.2 billion in April, and services were $24.9 billion in May, up from $24.8 billion in April.
* Imports decreased to $116.1 billion from $118.9 billion in April. Goods were $97.2 billion in May, down from $99.8 billion in April, and services were $18.8 billion in May, down from $19.1 billion in April.
* For goods, the deficit was $34.4 billion in May, down from $37.7 billion in April. For services, the surplus was $6.1 billion in May, up from $5.7 billion in April.
Goods by Category
* The April to May change in exports of goods reflected increases in capital goods; other goods; automotive vehicles, parts, and engines; and consumer goods. Decreases occurred in foods, feeds, and beverages and industrial supplies and materials.
* The April to May change in imports of goods reflected decreases in capital goods; consumer goods; automotive vehicles, parts, and engines; and industrial supplies and materials. Other goods and foods, feeds, and beverages were virtually unchanged.
Goods by Geographic Area (Not Seasonally Adjusted)
* The goods deficit with Canada increased from $4.5 billion in April to $4.9 billion in May. Exports increased $0.7 billion (primarily automobiles and automobile parts, power generating machinery, and transport equipment) to $15.2 billion, while imports increased $1.1 billion (primarily automobiles and automobile parts and transport equipment) to $20.1 billion.
* The goods deficit with Japan decreased from $6.4 billion in April to $4.8 billion in May. Exports decreased $0.2 billion (primarily inorganic chemicals) to $4.9 billion, while imports decreased $1.8 billion (primarily automobiles and automobile parts, electrical machinery, and computers and computer products) to $9.7 billion.
* The goods deficit with Western Europe decreased from $5.8 billion in April to $4.6 billion in May. Exports increased $0.9 billion (primarily transport equipment) to $16.2 billion, while imports decreased $0.3 billion (primarily automobiles and automobile parts, organic chemicals, and power generating machinery) to $20.8 billion.
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Contact Eamonn Fingleton |
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