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International Trade  
Released On 12/6/2018 8:30:00 AM For Oct, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Trade Balance Level$-54.0 B$-54.6 B$-55.0 B$-55.4 B to $-52.7 B$-55.5 B

Highlights
A slight 0.1 percent decline in exports and a slight 0.2 percent gain in imports made for a sizable 1.7 percent deepening in the nation's trade deficit in October to $55.5 billion which is just outside Econoday's consensus range.

The deficit with China was very deep, at $43.1 billion in October vs $40.2 billion in September for a year-to-date deficit of $420.8 billion that is 23 percent deeper than this time last year. This is important data for ongoing trade talks between the U.S. and China.

October's deficit with the EU, at $17 billion, also deepened as did the deficit with Japan at $6.2 billion. The deficit with Mexico, at $7.2 billion, eased slightly while the deficit with Canada, at $1.9 billion, widened slightly. Note that country balances, unlike other data in this report, are not adjusted for calendar or seasonal effects.

Exports, in possible tariff effects, show another sizable drop in foods, feeds & beverages, to $10.3 billion vs September's $11.0 billion. Exports of civilian aircraft were also weak, at $4.9 billion vs September's $5.2 billion. Services exports, an area of strength for the U.S., edged higher in the month to $69.6 billion.

Foods, feeds & beverages on the import side rose slightly to $12.3 billion with imports of consumer goods, which are a special sore spot in the U.S. trade picture, rising $2.0 billion to $57.4 billion. Imports of services rose modestly to $47.0 billion.

October's $55.5 billion headline deficit compares with a monthly average in the third-quarter of $52.8 billion and unfortunately marks a very weak opening for fourth-quarter net exports.

Consensus Outlook
Based on advance data for the goods portion of the trade report where the deficit deepened, forecasters see the October international trade balance at a consensus deficit of $55.0 billion. This would compare with a $54.0 billion deficit in September and a monthly average deficit of $52.4 billion in the third quarter.

Definition
International trade is composed of merchandise (tangible goods) and services. It is available nationally by export, import and trade balance. Merchandise trade is available by export, import and trade balance for six principal end-use commodity categories and for more than one hundred principal Standard International Trade Classification (SITC) system commodity groupings. Data are also available for 48 countries and 7 geographic regions. Detailed information is reported on oil and motor vehicle imports. Services trade is available by export, import and trade balance for seven principal end-use categories.  Why Investors Care
 
[Chart]
U.S. exports rise when foreign economies are strong. Weakness in the value of the dollar also helps exports, making U.S. goods and services less expensive to foreigners. Imports rise when the U.S. economy is strong. Strength in the dollar, making foreign products less expensive to U.S. buyers, helps imports.
Data Source: Haver Analytics
 
[Chart]
The nation's international trade balance has been in continuous deficit since the 1980s. Yet trade, even though in deficit, can still add to GDP provided the deficit is narrowing. A deepening deficit is a negative for GDP.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/52/63/74/55/36/67/68/39/510/511/212/6
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