U.S. trade deficit jumps 10 percent on higher oil imports
U.S. Business and Industry Council -- Manufacturing Business Technology, 1/11/2008 10:15:00 AM
The U.S. trade deficit worsened for the fourth straight month in November, jumping due to sharply higher oil imports and stagnating exports.
The November figures also indicate that export growth in the manufacturing sector is slowing while import growth is picking up.
America’s total November trade deficit of $63.12 billion represented a 10.30-percent increase from the revised October level of $57.77 billion—the highest monthly figure yet for 2007. Total exports crept up less than half a percent, to $142.31 billion; and total goods exports remained virtually unchanged at $100.95 billion.
Total imports, by contrast, rose by 3.00 percent in November, to $205.43 billion; while goods imports increased 3.50 percent, to $173.66 billion;and oil imports shot up 16.23 percent, to $34.44 billion.
The goods deficit rose 8.62 percent in November, from $66.94 billion to $72.71 billion; and the oil deficit surged 13.97 percent, from $26.35 billion to $30.03 billion.
Both the oil-import and oil-deficit figures set new monthly records, as did total exports and imports, and goods exports and imports. All these goods sector changes swamped the effects of a 4.58 increase in America’s longstanding surplus in services trade, to $9.59 billion—also a new record.
According to U.S. Business and Industry Council research Fellow Alan Tonelson, “The November figures make clearer than ever that the nation’s best hope for a sustainable trade balance, sounder national finances, and a healthier manufacturing sector lie in controlling imports, not boosting exports. Thus Washington’s obsession with promoting exports with new trade deals and its neglect of often unfairly traded imports add up to a completely mistaken set of priorities.”
U.S. exports of manufactures sank in November to $74.61 billion—a 5.32-percent drop from October’s revised $78.80-billion level. Manufactures imports, however, fell even more—by 6.16 percent to $130.45 billion. Consequently, the manufactures deficit fell 7.27 percent in November, from $60.22 billion in October to $55.84 billion.
Through November, U.S. manufactures exports hit $795.70 billion in 2007. The resulting 9.77-percent growth rate over 2006 levels was lower than the October year-to-date 2006 increase. Year-to-date manufactures imports reached $1.30 trillion, with the resulting growth rate of 4.82 percent outstripping the October increase.
The weaker dollar apparently continued to affect U.S. goods imports from the euro-zone countries, which fell 7.00 percent in November, to $23.52 billion. But U.S. goods exports to the region also decreased by 5.36 percent, to $15.19 billion, even though exchange-rate shifts should be giving U.S.-made products a major price advantage.
Despite China’s continuing undervaluation of its currency, the increase in the huge and chronic U.S. goods trade deficit with the People’s Republic paused in November. U.S. goods exports to the rapidly growing Chinese economy rose a modest 2.46 percent, from $5.68 billion to $5.82 billion; while much greater import flows fell 5.82 percent, from $31.61 billion to $29.77 billion. As a result, the U.S. goods deficit with China decreased 7.64 percent in November, from $25.93 billion to $23.95 billion.
Concludes Tonelson, “Due to China’s continued trade cheating, U.S. imports from the PRC are still way too high—especially in manufactures—and exports are way too low."
