- US trade deficit widened in September 2013 to $41.8 billion from a mildly revised $38.7 billion in August (previous $38.8 billion). Market expectations had been for a smaller $39.0 billion deficit in September.
- Nominal exports slipped 0.2% in September after holding steady in August. Imports rose 1.2% after being unchanged in August.
- Excluding the effect of prices, the volume of exports fell 0.7% in September while imports rose 1.3% thereby resulting in the real trade deficit (in chained 2009 dollars, Census basis) increasing to $50.4 billion from $47.4 billion in August.
- In a separate report, initial jobless claims inched down to 339,000 in the week ending November 8, 2013 from a revised 341,000 (was 336,000) the previous week. The level of claims in the latest week was above market expectations for a 330,000 reading. The four-week moving average of claims eased to 344,000 from 349,800 the previous week.
The US trade deficit widened to a larger than expected $41.8 billion in September 2013, following a slightly revised $38.7 billion shortfall in August. Market expectations had been for a $39.0 billion deficit in September. Nominal exports dipped 0.2% with the decline broadly based as only foods and feeds exports increased in September of the major categories in the report. Imports rose by 1.2% with motor vehicles and parts rising 3.4%; a 2.7% increase in petroleum imports and capital goods (ex-auto) imports were up 1.8% building on August’s 2.1% gain.
Excluding the effect of prices, the real trade deficit (in chained 2009 dollars, Census basis) expanded to $50.4 billion from an average $47.4 billion in July and August. In the third quarter of 2013, the real trade balance averaged $48.4 billion, which was wider than the $47.7 billion in the second quarter. Goods exports, on a real basis, increased at a 2.1% annualized pace while real goods imports rose at a 3.1% annualized clip.
Incorporating September’s data resulted in a larger real goods deficit in the third quarter of 2013 relative to the second-quarter 2013 level. This suggests that rather than net exports contributing 0.3 percentage points to the economy’s 2.8% growth rate as was in the advance estimate, the trade sector on balance provided no support to growth. The partial federal government shutdown and uncertainty created by the debt-ceiling debate in October are likely to take a toll on the fourth quarter’s growth rate although surprising strength in the October manufacturing and service sector PMI data, and the larger than expected rise in non-farm payrolls in the month suggest that the hit will be relatively limited. Against a backdrop of low inflation and a historically elevated unemployment rate, no change in Fed policy is likely in the near term.
In a separate report, initial jobless claims dipped 2,000 to 339,000 in the week ending November 8, 2013 from a revised 341,000 (was 336,000) the previous week. The level of claims in the latest week was below market expectations for a 330,000 reading.
RBC