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US Trade Deficit Dramatically Shrinks in October, As Expected

The US balance of trade figures took a turn for the better in October, but let's also take a look at how 2021 is shaping up.
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Balance of Trade 2021-10

US Balance of Trade 

The U.S. International Trade in Goods and Services report for, October 2021 shows a large drop in the trade deficit.

Key Points 

  • The goods and services deficit was $67.1 billion in October, down $14.3 billion from $81.4 billion in September, revised.
  • October exports were $223.6 billion, $16.8 billion more than September exports. October imports were $290.7 billion, $2.5 billion more than September imports. 

  • The October decrease in the goods and services deficit reflected a decrease in the goods deficit of $14.0 billion to $83.9 billion and an increase in the services surplus of $0.3 billion to $16.8 billion.

  • Year-to-date, the goods and services deficit increased $161.7 billion, or 29.7 percent, from the same period in 2020. Exports increased $315.1 billion or 17.9 percent. Imports increased $476.8 billion or 20.7 percent.

Economists Get One Right

The Econoday economic consensus was a $14.1 billion reduction in the deficit to $-66.8 billion from $-80.9 billion revised to $-81.4 billion.

Credit economists for reading (although sometimes they don't). The Advance Report on goods showed a $14.1 billion improvement. 

Econoday notes "Advance data on the goods side of October's report, reflecting a sudden clearing of bottlenecks, showed a more than $14 billion narrowing in the deficit."

US Quarterly Balance of Trade 

US Quarterly Balance of Trade 2021 Q3

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The quarterly numbers are a huge disaster for those who believe export data is meaningful (Hint: Biden and Trump, both attempt to use tariffs to reduce the deficit).

2021 Synopsis 

  • Q1: $-206.098 Billion
  • Q2: $-207.061 Billion
  • Q3: $-224.963 Billion

Those are the three largest net deficits in US history. 

If the October improvement to $-67.1 billion holds for the rest of the year, the 2021 Q4 total would be $-201.3 billion. That would be the fourth largest deficit in history.

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