August 2014 International Trade (General)

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Total August exports of $198.5 billion and imports of $238.6 billion resulted in a goods and services deficit of $40.1 billion, down from $40.3 billion in July. August exports were $0.4 billion more than July exports of $198.0 billion. August imports were $0.2 billion more than July imports of $238.3 billion.

In August, the goods deficit increased $0.1 billion from July to $59.9 billion, and the services surplus increased $0.3 billion from July to $19.8 billion. Exports of goods increased $0.1 billion to $138.8 billion, and imports of goods increased $0.1 billion to $198.7 billion. Exports of services increased $0.4 billion to $59.6 billion, and imports of services increased $0.1 billion to $39.9 billion.

The goods and services deficit increased $0.6 billion from August 2013 to August 2014. Exports were up $7.9 billion, or 4.1 percent, and imports were up $8.4 billion, or 3.7 percent.

As MarketWatch explained, however, the smaller trade deficit is thanks to oil exports:

The U.S. exported a record $14.1 billion in petroleum products and imported the least amount, $27.2 billion, since late 2010.

As a result, the nation’s petroleum deficit dropped in August to the lowest level in 10 years.

Oil production is surging in the U.S. because technologies such as fracking are allowing companies to tap reserves previously inaccessible.

Yet excluding petroleum, the U.S. trade deficit rose to $45.1 billion to mark the highest level in three months, mainly because of higher imports. Cheaper foreign currencies and a stronger dollar are enabling Americans to more easily afford foreign goods.

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On a global scale, data compiled by the Netherlands Bureau for Economic Policy Analysis showed that world trade volume increased by 1.4 percent in July (from the prior month) while prices fell by 0.3 percent.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.