U.S. Exports Still Booming

The U.S. trade increased $3.3 billion to $62.3 billion in February, $4.8 billion more than expected. The pick-up was because of a sharp 3.1% increase in U.S. imports, which was broad-based. Exports continued to boom, increasing 2% in February, pushing the year-over-year gain to 20.8%, the most since at least 1993. Exports reached $151.355 billion in February, about $70 billion more than five years ago, clearly illustrating the massive strides made by U.S. exporters in recent years.

The gains are providing a major cushion against the many factors ailing the U.S. economy, although the February data will cut GDP forecasts for the current quarter by as much as four-tenths of a percentage point.

It is difficult to reconcile the large 3.1% gain in U.S. imports given the weakness in U.S. economy and rising import prices. The gain is probably an anomaly, with a number of large gains following decreases in January and in prior months.

For example, imports of consumer goods increased 5.7% in February following a 3.6% decline in January and a 1.2% decline in December. The gain was led by an 11.3% gain in imports of pharmaceuticals, which followed a 4.8% gain in January.

Imports of apparel increased 3.9% following a 7.5% drop in January. Imports were strong for computer accessories (+5.5%), and semiconductors (+1.1%).

U.S. imports of crude oil were 9.879 million barrels per day vs. 10.394 million barrels in January, with the average price at $84.76 per barrel compared to $84.09 in January.

The U.S. trade deficit with China fell to $18.355 billion vs. $20.3 billion in January. The decrease is part of a seasonal trend, largely reflecting the Christmas holiday. Nevertheless, it is interesting that the February deficit with China was lower than for February 2007. This almost certainly reflects the weakness in U.S. consumer spending and rising import prices from China.

ALL TONY CRESCENZI BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market, first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.

TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.