What to make of the increase in the trade deficit? The answer is not straight forward and it is certainly not the time to be declaring a trend.
The Trade deficit for January 2011 had a moderate expansion on the back of continuing record exports for Januarys – but the bigger news is that imports too hit an all time high for January.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total January exports of $167.7 billion and imports of $214.1 billion resulted in a goods and services deficit of $46.3 billion, up from $40.3 billion in December, revised. January exports were $4.4 billion more than December exports of $163.3 billion. January imports were $10.5 billion more than December imports of $203.6 billion.
In January, the goods deficit increased $6.1 billion from December to $59.8 billion, and the services surplus was virtually unchanged at $13.4 billion. Exports of goods increased $4.0 billion to $120.5 billion, and imports of goods increased $10.1 billion to $180.3 billion. Exports of services increased $0.5 billion to $47.2 billion, and imports of services increased $0.4 billion to $33.8 billion. The goods and services deficit increased $11.7 billion from January 2010 to January 2011. Exports were up $23.0 billion, or 15.9 percent, and imports were up $34.7 billion, or 19.3 percent.
Although Econintersect believed that the trade deficit would grow this month based on container counts and rising oil prices, at this point we are not yet forecasting a continuing upward trend in the deficit because January has a history of deficit jumps.
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