International Trade in Goods and Services
The U.S. Census Bureau announced today that the goods and services deficit was $80.2 billion in November, up $13.0 billion from $67.2 billion in October, revised.
Trade Key Details
- Exports, Imports, and Balance (Exhibit 1) November exports were $224.2 billion, $0.4 billion more than October exports.
- November imports were $304.4 billion, $13.4 billion more than October imports.
- The November increase in the goods and services deficit reflected an increase in the goods deficit of $15.1 billion to $99.0 billion and an increase in the services surplus of $2.1 billion to $18.8 billion.
- Year-to-date, the goods and services deficit increased $174.6 billion, or 28.6 percent, from the same period in 2020.
- Exports increased $354.4 billion or 18.2 percent. Imports increased $529.0 billion or 20.7 percent
Three-Month Moving Averages
• The average goods and services deficit increased $2.3 billion to $76.3 billion for the three months ending in November.
• Average exports increased $3.7 billion to $218.3 billion in November.
• Average imports increased $6.0 billion to $294.5 billion in November.
The three-month moving average deficit of $76.3 billion is a new record.
The Bloomberg Econoday economic consensus was for the deficit to increase to $71.6 billion.
The census bureau reported a deficit of $80.2 billion.
The advance trade numbers (goods) gave a hint at what would happen in the full report (goods and services) today.
Nonetheless, economists still missed it by a mile.
Let's tune into what I had to say on December 29: Goods Trade Deficit Unexpectedly Swells to Second Worst in History
Touch and Go for a New Net Record
The previous net record was $-81.44 billion. If the advance number holds and there are no back revisions, then we can calculate what the services number needs to be for a new record.
97.778 - 81.44 = 16.338
If the services surplus is less than $16.338 billion then we will have a new net record trade deficit.
Place Your Bets
And there you go.
The census bureau reported a services surplus of $18.82 billion thereby averting a new overall record deficit.
Somehow, this was far too complicated for the economists to figure out.
Perhaps they expected an even bigger jump in the services surplus. But if so, why?
This is what likely happened. Economists noted the $67.2 billion overall deficit in October and padded it a little to $71.6 billion without properly factoring in the advance number.
Math is hard!
Make Trade Math Great Again
A reader asked me about iPhones. It was an excellent question that addresses some of the silliness in counting imports and exports.
Q: "If I ordered an Apple iPad, it comes directly from China, is that an import to the USA?
Please consider the answer: Make Trade Math Great Again, iPhone Example: Globalization in Reverse
I wrote that in 2018. The logic still applies.
Thanks for Tuning In!
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