November 2017 Balance of Trade
Submitted by Atlas Indicators Investment Advisors on January 14th, 2018America’s leadership in the global economic expansion is evident in the November 2017 Trade Balance report from the Bureau of Economic Analysis. America is increasing its purchases from foreign countries faster than trading partners are increasing their purchases from our nation; an important takeaway is that both imports and exports are expanding. With a shortfall of $50.5 billion, our nation’s trade deficit reached its worst level since January 2012. Year-to-date, the goods and services deficit is 11.6 percent greater versus the same period in 2016.
Exports improved after nearly stagnating a month earlier. America sold $4.4 billion more goods and services to foreign buyers than a month earlier. Rising $4.3 billion, exports of goods made up most of the improvement. Foreign companies purchased $2.5 billion more in capital goods. Additionally, exports of passenger cars increased $600 million, and consumer goods improved by $700 million.
America imported $6.0 billion more goods in the period, and service imports fell less than $100 million. With cell phones and household goods leading the way, consumer goods made up $2.4 billion of the monthly increase of goods imports. Industrial supplies and materials jumped $2.2 billion, and capital goods rose $1.6 billion. Most major service categories were virtually unchanged on the import side of the report.
While this report suggests America is driving the global economy, it is also going to put downward pressure on the fourth quarter 2017 gross domestic product (GDP) tally. When totaling the output of our nation, net exports are part of the equation. Since the trade balance remains in a deficit, it subtracts from the other categories (consumption, business investment, and government spending). Net exports are on a worsening trend and will likely continue to put a lid on the nation’s economic growth.