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| Commentary on the September 2001 Trade Figures |
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Monday, November 26th, 2001
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America�s monthly trade deficits (goods and services basis):
August 2001 $27.1 billion
September 2001 $18.7 billion
September 2000 $34.5 billion
September 1999 $23.4 billion
On the face of it, with a goods and services deficit in goods and services of just $18.7 billion, the September trade figures were the best in many months. Unfortunately, the fall was triggered by the worst of causes: the events of September 11.
Accounting adjustments stemming from receipts of compensation from foreign insurers in respect of the atrocities boosted America�s net service receipts by $11 billion. Absent this one-time factor, America�s September trade deficit would have actually widened considerably compared to August. And the September deficit would have been wider still had not many Americans been dissuaded by the atrocities from travelling abroad for business trips and vacations.
All in all the underlying deficit is running at about $30 billion a month � a disastrously high figure by any standards and particularly high given that, in a business downturn such as we are currently experiencing, America�s demand for imports normally declines quite disproportionately compared to demand for U.S.�made goods. Demand for imports this time has not fallen as far for a good reason: in many categories of goods, there is virtually no U.S. production left. So to the extent that America wants to consume, it necessarily must import.
Attached is an official commentary that accompanied the announcement of the September figures.
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Goods and Services Deficit Decreases in September 2001
The Nation's international deficit in goods and services decreased to $18.7 billion in September, from $27.1 billion (revised) in August, as imports decreased more than exports.
Goods and Services
* Exports decreased to $77.3 billion from $84.5 billion in August. Goods were $55.6 billion in September, down from $59.5 billion in August, and services were $21.7 billion in September, down from $25.0 billion in August.
* Imports decreased to $96.0 billion from $111.6 billion in August. Goods were $91.5 billion in September, down from $93.6 billion in August, and services were $4.5 billion in September, down from $18.0 billion in August.
* For goods, the deficit was $35.9 billion in September, up from $34.1 billion in August. For services, the surplus was $17.2 billion in September, up from $7.0 billion in August.
Goods by Category
* The August to September change in exports of goods reflected decreases in capital goods ($1.6 billion); industrial supplies and materials ($1.0 billion); other goods ($0.3 billion); consumer goods ($0.3 billion); foods, feeds, and beverages ($0.3 billion); and automotive vehicles, parts, and engines ($0.3 billion).
* The August to September change in imports of goods reflected decreases in capital goods ($0.9 billion); industrial supplies and materials ($0.7 billion); and automotive vehicles, parts, and engines ($0.6 billion). An increase occurred in foods, feeds, and beverages ($0.1 billion). Other goods and consumer goods were virtually unchanged.
Goods by Geographic Area (Not Seasonally Adjusted)
* The goods deficit with China increased from $8.1 billion in August to $8.5 billion in September. Exports decreased $0.5 billion (primarily transport equipment) to $1.4 billion, while imports decreased $0.1 billion (primarily apparel and footwear) to $9.9 billion.
* The goods deficit with Mexico increased from $2.5 billion in August to $3.0 billion in September. Exports decreased $1.3 billion (primarily electrical machinery and transport equipment) to $7.7 billion, while imports decreased $0.9 billion (primarily electrical machinery, telecommunications equipment, and apparel) to $10.7 billion.
* The goods deficit with Western Europe decreased from $5.4 billion in August to $3.8 billion in September. Exports decreased $0.7 billion (primarily transport equipment) to $12.8 billion, while imports decreased $2.3 billion (primarily automobiles and automobile parts, transport equipment, and pharmaceutical products) to $16.6 billion.
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Contact Eamonn Fingleton |
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