The U.S. trade deficit shrank in March to $58.2 billion from $61.7
billion in February. That figure was revised from $62.3 billion. The deficit fell about $3 billion more than expected, though it has not moved much over the past 18 months, averaging $59.1 billion during the period.
During that time, U.S. exports have grown robustly and are now up 15.5% compared to a year ago. While that represents a decline from the previous month's record of 20.6%, it is even better than the robust 12.7% average of the past four years. Moreover, the current month's drop was related in part to a big drop in exports of aircraft, which was responsible for 60% of the month's 1.7% drop in exports.
When today's trade data are combined with data on inventories and
construction activity, the running tally for the May 29th revision to Q1 GDP is for little change to the 0.6% gain that was reported in the advance of the April 30th estimate.
The decline in the U.S. trade deficit is most impressive when you
consider that it has declined despite a massive increase in the price of oil. Excluding imports of petroleum products, the U.S. trade deficit was over $30 billion smaller, at $27.8 billion. It was recently as low as $23.6 billion in January--peanuts for a $14.2 trillion economy.
Tony Crescenzi Blog Lean U.S. Inventories 5/8/2008 11:12 AM EDT An unusual and unexpected decline took place in the March numbers.
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.
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