Trade Gap in U.S. Unexpectedly Falls as Oil, Auto Imports Drop

[TomClash]

Source: Bloomberg

Trade Gap in U.S. Unexpectedly Falls as Oil, Auto Imports Drop

By Shobhana Chandra

March 11 (Bloomberg) -- The trade deficit in the U.S. unexpectedly narrowed in January as demand for foreign oil and automobiles dropped.

The gap decreased 6.6 percent to $37.3 billion from a revised $39.9 billion in December as Americans imported the fewest barrels of crude oil in a decade, Commerce Department figures showed today in Washington. Exports decreased 0.3 percent, the first decline since April, on fewer shipments of commercial aircraft and autos.

<snip>

The trade gap was projected to widen to $41 billion, from an initially reported $40.2 billion in December, according to the median forecast in a Bloomberg News survey of 73 economists. Projections ranged from deficits of $37 billion to $44 billion.

Exports decreased by $500 million to $142.7 billion. Auto demand from abroad fell by $544 million, while shipments of commercial aircraft declined by $474 million.

Fewer Planes

Sales of American-made planes may have rebounded last month. Boeing Co. delivered 23 aircraft for overseas buyers in January, down from 38 the prior month, according to figures from the Chicago-based company. Foreign deliveries climbed to 28 in February.

American-made goods have become more attractive for overseas buyers following a decline in the dollar last year. It has fallen about 11 percent against a trade-weighted basket of currencies from the U.S.’s biggest trading partners from a five- year high reached on March 9, 2009.

“Rising exports will be an important driver for manufacturing,” said IHS Global Insight’s Gault.

San Jose, California-based Cisco, the biggest maker of networking equipment, said it sees “underlying strength” in the economy and that customers are saying they need to spend more on technology.

‘Positive’ Trends

“We see very positive spending trends across all of our business segments” and across the world, Ned Hooper, who is in charge of Cisco’s consumer unit and mergers and acquisitions, said on March 3 at a conference in San Francisco.

Imports fell 1.7 percent to $180 billion from $183.1 billion in December. The U.S. imported 245 million barrels of crude oil in January, the fewest since February 1999. The decrease swamped an increase in oil prices.

Purchases of foreign-made automobiles and parts dropped by $1.48 billion, led by decreases in purchases of German and Japanese cars.

After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit shrank to $41 billion from $43.8 billion. The January figure was in line with the fourth-quarter average, indicating trade so far is not influencing growth estimates.

more . . .

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aDlAxSGTM89U&pos=1

[dmallind]

1. It will still be bad news to doomers

At least in this instance they might have some cover, since the trade gap is narrowing in large part because we are not spending due to shaky confidence and lower incomes. However this will in no way stop the Chicken Littles from talking out of both sides of their mouths as usual and saying that trade gap increases and decreases are bad.

[depakid]

2. Depending on the reasons for it, a narrowing trade gap IS a negative indicator

Something you might understand if you had more interest in economics than in admonitions.

[AllentownJake]

4. Don't bother

McCarthy tactics rule the day.

[dmallind]

5. You mean like I said in my earlier unedited post you responded to?

Now will that stop those doomers who have "interest" in economics (but usually little knowledge) from claiming it's terrible news when we have bigger trade gaps? Did the DU Doom Patrol revel in high trade gaps? Will they when the gaps return?

Hypocrisy is the issue here. When moves in both directions become doom (just like the number of job seekers in another thread) what does that tell you about the real motives of those who sell doom?

[AllentownJake]

6. Did we produce more oil to use ourselves?

Or did we do less economic activity and use less oil or use an alternative fuel...those are the type of questions your responder was asking.

You get a datapoint. The next question is why did it happen, and that is where you get good news or bad news.

Kind of like the BLS numbers where you get one number going down, with no logical explanation on why it went down. More people lost jobs, number declines, why did this happen.

[dmallind]

16. Again you are arguing against a claim I never made

I am not saying this datum is good - I am saying it will be (and has been) pointed to as a sign of doom even though the same metric going in exactly the opposite direction is ALSO pointed to as a sign of doom.

And you know full well why the BLS data are mismatched - they use separate surveys, and even if they didn't a decrease in job seekers greater than the ratio of decrease in jobs will reduce an unemployment RATE. Incidentally that metric too is pointed to as doom in either direction. NO we start seeing discouraged workers looking for jobs again, the Chicken Littles say that this is a sign of desperation, when they said the same damn thing about discouraged workers STOPPING looking for jobs too.

All I ask for is an end to hypocrisy. Doomers should tell what direction they want what metrics to move in and accept it as good news when they do, and bad news when they don't.

[AllentownJake]

17. Every survey indicated that there was a decrease in jobs

Why did one survey drop to 9.7%

10% is a psychological number...it is why you pay .99 for something instead of $1.00. I'm sure all stops were pulled out to bring that number into single digits. Is there that much of a difference between 9.7 and 10% nope.

There is no fucking hypocrisy. Something can go down and be good or bad based on the reasoning.
A number is a number, the why is the important thing. Not the damn number.

[dmallind]

19. So lemme ask

If more people are looking for work because they are not discouraged any more, and that drives the unemployment number up even if employed numbers increase, will that be good news or bad news?

[AllentownJake]

21. That was the beauty of the January report

Discouraged workers went down. If what you said were true, both the U3 and U6 numbers would have moved in opposite directions. With the U3 number dropping and the U6 number increasing. They removed people from the workforce all together. They disappeared a bunch of people.

:rofl:

[dmallind]

23. Maybe you missed the "if" part. Try again

Would it be good news or bad news?

[AllentownJake]

24. What are you talking about

1) Good or bad news all depends on one perspective, who you are.

2) I have no clue what you are referring to as good or bad.

Now, you want to live in a black and white world, cool.

Here is what I said about this report which you tried to apply your black and white thinking to.

Manufacturing imports and exports both fell. The major driver was a decline in the importation of oil. That indicates the US either produced oil, or used less of it.

Now is here where it goes into opinion.

I think there was less travel during the holidays and people kept their thermostats at a degree or two below normal, to save money.

That is my guess.

It is not the end of the world, it shows people are tighter with their budgets in the time period.

You can make good or bad news depending on what you believe is good or bad about that. People spent less money. End of story, is my belief.

[depakid]

8. Lack of demand for imports and a falling dollar aren't things to crow about

in the economic climate during the period reported on.

[AllentownJake]

11. Where the fuck did it go

You think if he/she wanted to talk shit, they'd want to stick around and debate their position.

I was going to let this article pass, because the banking sector right now is more of an important issue than the trade deficit, but I thought someone wanted to challenge a "doomer" to a debate on economics.

[depakid]

12. I'd actually love to see America use less petroleum use and import a lot less "stuff"

but for the right reasons.

Of course, as geophysical limits assert themselves, that will happen anyway but the sooner we get those "right reasons" in place, the less pain there will be.

[dmallind]

Again the constant doom is the issue regardless of the direction of this metric

You will seek in vain for any indication that I personally like this data - only that I personally laugh my ass off at constant doomers who complain about this and other data moving in EITHER direction - with the same doom!

[dmallind]

14. Again the constant doom is the issue regardless of the direction of this metric

You will seek in vain for any indication that I personally like this data - only that I personally laugh my ass off at constant doomers who complain about this and other data moving in EITHER direction - with the same doom!

[AllentownJake]

18. You don't wish to comment inteligently or say what is behind a number

That is your problem, lack of critical thinking skills. I'm sorry nature didn't bless you.

[dmallind]

20. Snort! Whatever gets you through the night. Tell me why it's bad news when it happens in reverse.

[AllentownJake]

22. Oil is the primary driver for the decline

Now the question is. Why did oil decline being imported?

1) We used more of our own domestic oil
2) We used less oil

Those are your two options for an explanation. What do you think happened.

The other areas saw a decline in tandem. Manufacturing imports and exports both declined.

The answer to the why oil declined is where you look to see what the data actually says about economic health for that month, not the overall number.

[AllentownJake]

3. The dollar appreciates

which it has the momentum moves the other way.

Honestly month to month data is really silly to get excited for whether you are a "doomer" or a "rainbow bright"

Reality. Wages are going to deflate over the next 2 years (supply and demand). Taxes are going to increase (they have to finance the debt of both the states and federal government). More property is going to go into default. More state workers are going to lose their jobs, unemployment recovery is going to be stagnant and those that return to the job market will have less pay and benefits than when they entered. It is what happens in a deflationary debt crisis, and this one is a particularly nasty little bugger.

Outside of borrowed money the government spending, I haven't seen much growth in this economy and the government has pretty much reached its limit on what it can borrow without having to pay increased interest cost. If what they did "worked" when that support beam is taken away, you won't see a decline.

[AllentownJake]

7. Imports and exports both decreased

People traveled less during the Holiday season.

The article also quotes someone from March 3rd...this is a really odd piece.

[Roland99]

9. Affects from massive snowfalls in the Atlantic and Northeast and parts of the Midwest?

let's see if any trend forms.

Doubt it.

[AllentownJake]

10. The December data has less oil consumption

It wasn't unseasonably warm here, and it was the holidays. You do the math.

[blue97keet]

13. Importing less crude oil but gas prices rising?

[Romulox]

15. Oil prices are set by a cartel, not market demand. nt