Trade Gap Narrows in October, But Less Than Estimates

In October, the U.S. trade gap narrowed to a disappointing $43.4 billion from a revised $43.6 billion in September. Analysts expected the deficit to narrow to $41 billion. Exports were up 1.2 percent after sliding 1.8 percent the month before while imports added 0.9 percent after recording no change. The October petroleum goods trade gap was $15.2 billion, up from $14.0 billion in September. Petroleum imports were down 0.6 percent while exports sank 11.1 percent. The changes in petroleum no doubt reflect the drop in crude oil prices.

The October decline in the goods and services deficit reflected a decrease in the goods deficit of less than $0.1 billion to $62.7 billion and an increase in the services surplus of $0.1 billion to $19.2 billion. Year-to-date, the goods and services deficit increased 5.1 percent from the same period in 2013. Exports increased 3.1 percent. Imports increased 3.4 percent.

On the month, exports of capital goods increased $1.7 billion. Civilian aircraft increased $1 billion while generators, transformers & accessories edged up $0.3 billion. Exports of services increased $0.3 billion to $59.5 billion in October. The increase reflected increases in financial services, in maintenance & repair services and in charges for the use of intellectual property.

Imports of goods increased $2.0 billion to $200.7 billion in October. Automotive vehicles, parts and engines increased $1.3 billion while capital goods increased $1.1 billion.

Recent History Of This Indicator:
The U.S. international trade gap in September expanded to $43.0 billion from $40.0 billion in August. Analysts expected a deficit of $40.7 billion. Exports declined 1.5 percent in September, following a rise of 0.3 percent in August. Imports were unchanged, following a 0.1 percent uptick the month before.

The petroleum gap grew to $14.0 billion from $13.1 billion in August. The goods excluding petroleum gap increased to $47.2 billion from $45.5 billion in August. The services surplus slipped to $19.6 billion from $20.2 billion.

Overall, slower global growth has nudged down growth in the U.S. A higher dollar may be playing somewhat of a role in softer exports. But recently lower oil prices likely will result in a favorable number for October.