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| Commentary on the January 2001 Trade Figures |
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Tuesday, March 20th, 2001
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Figures released today for America's trade in January show that the recent downward trend in the monthly trade deficits has proved short-lived. The January deficit at $33.3 billion compares with a revised figure of $33.2 billion for December 2000-- not a big increase perhaps but still an increase. This breaks a pattern of falling deficits which had begun in September last year and had reportedly continued into December of 2000.
As it happens, the December decline reported a month ago has proved to have been a mirage. In today's announcement the December number was revised upwards and the revised number exceeded that recorded in November. Thus the January deficit represents the second increase in a row and ranks as second only to last September's deficit of $33.5 billion as the worst ever recorded.
Perhaps the most meaningful way to look at the January deficit is to compare it with the $28.0 deficit recorded a year. The latest figure represents a rise of nearly 19 percent in just one year. And it is more than double the deficit of $16.2 billion recorded in January 1999.
The latest figure is even more disappointing given that consumer demand in the United States has been weak since the fall. Remember that until recently, the standard explanation for America's huge trade deficits was that the American economy was booming. Thus the trade deficits were supposedly just a by-product of economic success. Now that the deficits are continuing at an ultra high level at a time of weakened consumer demand it is clear that they convey a much darker message about the true state of American industrial prowess.
Attached below is the Census Bureau's statement on the latest figures:
Goods and Services Deficit Increases in January 2001
The Nation's international deficit in goods and services increased to $33.3 billion in January, from $33.2 billion (revised) in December, as imports increased more than exports.
Goods and Services
Exports increased to $89.7 billion from $89.2 billion in December. Goods were $64.7 billion in January, up from $64.1 billion in December, and services were $24.9 billion in January, down from $25.1 billion in December.
Imports increased to $122.9 billion from $122.4 billion in December. Goods were $104.2 billion in January, up from $103.7 billion in December, and services were $18.7 billion in January, virtually unchanged from December.
For goods, the deficit was $39.5 billion in January, down from $39.6 billion in December. For services, the surplus was $6.2 billion in January, down from $6.4 billion in December.
Goods by Category
The December to January change in exports of goods reflected increases in capital goods and consumer goods. Decreases occurred in automotive vehicles, parts, and engines and industrial supplies and materials. Foods, feeds, and beverages and other goods were virtually unchanged.
The December to January change in imports of goods reflected increases in consumer goods; automotive vehicles, parts, and engines; industrial supplies and materials; foods, feeds, and beverages; and other goods. A decrease occurred in capital goods.
Goods by Geographic Area (Not Seasonally Adjusted)
The goods deficit with China increased from $6.1 billion in December to $7.2 billion in January. Exports decreased $0.4 billion (primarily transport equipment) to $1.2 billion, while imports increased $0.8 billion (primarily apparel and footwear) to $8.4 billion.
The goods deficit with Japan decreased from $6.1 billion in December to $5.9 billion in January. Exports decreased $0.7 billion (primarily automobiles and automobile parts, and transport equipment) to $5.3 billion, while imports decreased $0.9 billion (primarily automobiles and automobile parts, and electrical machinery) to $11.1 billion.
The goods deficit with Western Europe increased from $3.6 billion in December to $5.6 billion in January. Exports decreased $1.5 billion (primarily transport equipment) to $15.2 billion, while imports increased $0.4 billion (primarily organic chemicals and petroleum and petroleum products) to $20.8 billion.
This and more information is provided in the Bureau of the Census and Bureau of Economic Analysis press release: U.S. International Trade in Goods and Services: January 2001.
For further information on goods, contact Nick Orsini, Foreign Trade Division, Bureau of the Census, on (301) 457-2311; on services, contact Christopher Bach, Bureau of Economic Analysis, on (202) 606-9545. The next release is April 18, 2001
Note: Total goods are reported on a balance of payments basis; commodity and country detail for goods are on a Census basis. Definitions are explained in the notes to the monthly press release.
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Contact Eamonn Fingleton |
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