November Balance of Trade

The difference between imports and exports improved in November according to the Bureau of Economic Analysis. The trade deficit shrank to $34.3 billion from $39.3 billion in October (originally tallied at $40.6 billion). This is a result of imports totaling $229.1 billion and the nation exporting $194.0 billion. November’s tally is the smallest trade deficit since October 2009.

Exports improved for both goods and services. On the goods side, America’s trading partners increased their purchases of industrial supplies, capital goods, and auto related wares. There was a slight decrease in consumer goods and food related items but this decrease was smaller than the increases from the other categories. Service exports increased in the period too. Three areas of the service sector (travel, passenger fares, and royalties & license fees) led the increase.

Imports of goods fell in November but service imports increased over October. Americans purchased fewer foreign made industrial supplies, foods, and consumer goods. But more money was spent on automobiles and capital goods. The category “other transportation” led the service imports higher. This includes things like freight and port services.

The trade deficit is shrinking while it appears the world economy continues to expand. This may be pointing to an increase in American competitiveness. If this is indeed the case, firms may see orders improve which should help their profitability and may lead companies to hire. Atlas is taking note of the positive tone in this release. (by C. Cox)