As reported by the Foreign Trade division of the U.S. Census Bureau this morning (link to the report provided above), the October trade deficit fell unexpectedly from $44.6 billion in September to $38.7 billion. Exports were up $4.9 billion while imports were down $0.9 billion.
Of the $4.9 billion jump in exports, $3.3 billion is due to “industrial supplies and materials” ($2.6 billion) and “foods, feeds and beverages” ($0.7 billion). Most of the former category is due to a jump in exports of natural gas, fuel oil and other petroleum products and chemicals.
Crude oil imports fell by $2.3 billion. Otherwise, imports actually rose by $1.4 billion.
In other words, virtually all of the improvement in the October trade deficit can be attributed to swings in oil imports and exports and a jump in food exports. Consequently, this puts exports closer to being on track for meeting Obama’s goal of doubling exports in five years but, until the October report, exports were lagging this goal badly. Goosing the export total with a one-month gush of petroleum and food products (neither of which contributes anything to job growth) isn’t a very convincing step in meeting the president’s goal. I expect to see a reversal in November’s report when it’s released next month.
It’s also interesting that imports seem to have hit a ceiling in the last few months, not rising above $200 billion per month. I also expect that barrier to be broken. Time will tell.
Here’s an update of my charts: