EnThe U.S. trade deficit increased for a 15th straight month on a year-over-year basis in December, Panjiva analysis of official data shows. A 10.4% rise in imports outpaced a 9.2% growth in exports, leading to a $71.4 billion deficit – both a new one month record and 13% higher than economists’ expectations according to Bloomberg.
The growth in imports was broad-based, with seaborne freight contributing 3.8% points to growth, as outlined in Panjiva research of January 11, while other transportation modes increased the total by 3.7% points – the most since February.
Source: Panjiva
As can be expected the continued strength of the corporate sector has driven higher spending, with capital goods imports having risen 13.2% in December. The implementation of tax reform, which many companies are using to driven increase investment, will likely continue that growth in early 2018.
A similar pattern, driven by consumer confidence, likely drove the 12.5% rebound in consumer goods. That’s a rate not seen since the March 2015 recovery from west coast port strikes. The implementation of tariffs against washing machines won’t make a major difference, but may just be the first of a range of tariffs the Trump administration could apply.
The data for January and February may also be flattered by the lunar new year in Asia being 19 days later than a year earlier.
Source: Panjiva
Export growth slowed from 10.6% a month earlier, but is still the second fastest rate since February 2012. All the major export lines improved. Increasing sales of energy, captured by an 18.3% rise in industrial supplies, have flattered the figures though with growth of all other sectors being a more modest 5.6%.
Source: Panjiva
