Friday, June 8, 2007

Trade Deficit Narrows

From the BEA:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total April exports of $129.5 billion and imports of $188.0 billion resulted in a goods and services deficit of $58.5 billion, $3.9 billion less than the $62.4 billion in March, revised. April exports were $0.2 billion more than March exports of $129.2 billion. April imports were $3.6 billion less than March imports of $191.6 billion.

In April, the goods deficit decreased $3.7 billion from March to $67.1 billion, and the services surplus increased $0.2 billion to $8.6 billion. Exports of goods were virtually unchanged at $91.1 billion, and imports of goods decreased $3.6 billion to $158.2 billion. Exports of services increased $0.2 billion to $38.4 billion, and imports of services were virtually unchanged at $29.8 billion.

In April, the goods and services deficit was down $3.8 billion from April 2006. Exports were up $12.8 billion, or 10.9 percent, and imports were up $8.9 billion, or 5.0 percent.

The cumulative year to date trade deficit total for 2007 is 6.6% less than the year to date totals in 2006.

A few points.

Since January 2005, exports have increased 26.68% while imports have increased 19%. At this pace, it will take a long time for exports to catch-up to imports. This means it's pretty doubtful we can simply export our way out of the trade deficit.

Here's a chart of the difference between imports and exports going back to January 2005. Notice there really isn't a meaningful difference between the numbers for the past 2.5 years.

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