Econoday Economic Report: International Trade June 10, 2010

Resource Center » Event Release Dates | Event Definitions | Today's Calendar

International Trade

Released On 6/10/2010 8:30:00 AM For Apr, 2010

	Prior	Consensus	Consensus Range	Actual
Trade Balance Level	$-40.4 B	$-41.0 B	$-42.0 B to $-37.5 B	$-40.3 B

Highlights
Weaker exports led to a widening of the trade deficit in April. The overall trade gap widened to $40.3 billion from $40.0 billion in March. The April shortfall came in a little smaller than the market forecast for a $41.0 billion deficit. For the latest month, exports slipped 0.7 percent while imports decreased 0.4 percent.

The petroleum goods gap, however, narrowed to $24.0 billion from $24.5 billion in March. The nonpetroleum deficit widened to $27.9 billion in April from $26.7 billion the month before.

By end-use categories, goods exports' weakness was led by a $0.7 billion decline in consumer goods. Foods, feeds & beverages fell $0.6 billion. Industrial supplies and autos were up $0.6 billion and $0.1 billion, respectively.

Softness in goods imports was led by a $1.7 billion fall in consumer goods-indicating that businesses are more cautious about consumer demand in coming months. Auto imports dipped $0.2 billion. However, the bright spot in imports is a $1.4 billion jump in capital goods excluding autos. Businesses appear to see demand strong enough to expand or upgrade capacity.

Today's report raises the issue of whether sovereign debt problems in Europe are damping overall demand. Due to the drop in exports, equities should not like today's numbers despite the deficit being smaller than expected. Also, jobless claims dipped less than expected. But news from Asia has been positive and that is the focus of markets.

Market Consensus before announcement
The U.S. international trade gap for goods and services in March trade gap worsened to $40.4 billion from $39.4 billion in February. Imports and exports surged 3.1 percent and 3.2 percent, respectively, but the import component's larger base meant more dollars went abroad at a faster pace for the month. The latest worsening was primarily due to a spike in petroleum imports. We could see a slowing in the red ink in April or even marginal improvement as seasonally adjusted spot prices for crude oil actually edged down about 0.8 percent for the month on average. Still, inventory restocking and equipment investment could keep upward pressure on overall imports.

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 36 countries and 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

Exports grow when foreign economies are strong. The weaker the foreign exchange value of the dollar, the less expensive goods and services are to foreigners, and this also helps spurt export activity. Imports grow when U.S. economic growth is robust. Imports are also spurred by a strong foreign exchange value of the dollar.
Data Source: Haver Analytics

The international trade balance has posted a deficit almost continuously since the 1980s. Any trade deficit is a drag on U.S. GDP growth, but a smaller deficit adds to growth, while a larger deficit decreases GDP growth.
Data Source: Haver Analytics

2010 Release Schedule

Released On: 1/12 2/10 3/11 4/13 5/12 6/10 7/13 8/11 9/9 10/14 11/10 12/10

Release For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct