Summary
Last Friday, the Commerce Department reported that the nation's trade deficit in January rose to $58.27 billion. This was about $2.5 billion higher than December's revised shortfall of $55.74 billion. Crude oil imports made no contribution to January's increase. However, going forward, the news from this sector will not be as good!
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Based on the Commerce Department's report of last Friday, the US trade deficit (goods and services) came in at $58.27 billion in January, compared with a revised December deficit of $55.74 billion. (The December figure was originally reported at a negative $56.40 billion.)
2004/2003 Trade Deficits (Revised)
Incorporating the revisions contained in Friday's release, the US trade deficit during 2004 totaled almost $617.1 billion, which was about $650 million lower than the numbers released last month. Based on current data, the nation's trade deficit in 2004 was $120.6 billion or 24.3% above 2003's red ink.
2004* 2003*
------- -------
December $ 55.744 $ 44.011
November $ 59.415 $ 39.994
October $ 55.891 $ 41.490
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4th Qtr. $171.050 $125.495
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September $ 51.188 $ 41.251
August $ 53.968 $ 40.185
July $ 50.707 $ 40.814
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3rd Qtr. $155.863 $122.250
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June $ 55.421 $ 40.035
May $ 47.388 $ 40.827
April $ 48.511 $ 42.519
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2nd Qtr. $151.320 $123.381
------- -------
March $ 47.128 $ 43.659
February $ 45.863 $ 40.375
January $ 45.847 $ 41.354
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1st Qtr. $138.838 $125.388
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12-Mo. Total $617.075 $496.508
======= =======
*Monthly figures and quar-
terly totals may not add
to the annual totals due
to seasonal adjustment and
small rounding differences.
---------------------------------
January Trade Figures
In January, the United States ran a trade deficit (goods and services) of $58.27 billion, up about $2.5 billion from December's revised deficit of $55.74 billion. January was the second largest monthly shortfall in history, trailing November 2004's record of $59.33 billion by $1.06 billion.
January's deficit was the result of imports totaling $159.10 billion (a record), and exports totaling $100.83 billion. These figures compared with respective revised import/export figures for December of $156.17 billion and $100.43 billion. Thus, in comparing January to December, imports were up about 1.9%; exports rose 0.4%.
As the table appearing below indicates, crude oil imports totaled $11.41 billion in January, about $350 million below December's $11.76 billion. Thus, oil played no role in the rise in January's total deficit. The news from this sector going forward will not be as good, however.
The January oil decline was entirely the result of a drop in the average price per barrel, to $35.35 from $36.63. But oil prices during February and March (to date) have registered a very sizable increase. In turn, this should be reflected in the trade figures for these months when they are reported in March and April, respectively. As a guide, the per-barrel price used in November in computing the trade figures was $41.15. In October, it was a record $41.79.
Crude oil imports were equal to 7.2% of total imports in January, down from 7.5% in December. In January, crude imports equaled 8.5% of goods-only imports, which were $133.5 billion.
(NOTE: The above calculations take license with mixing seasonally adjusted and seasonally unadjusted data. For the purpose at hand, the distortion in not significant.)
During 2004, crude oil imports totaled $131.7 billion or 7.5% of total imports. Of goods-only imports for the twelve-month period ($1473.1 billion), crude imports equaled 8.9%. (Again, these calculations mix seasonally adjusted and seasonally unadjusted data).
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TOTAL U.S. IMPORTS AND CRUDE OIL IMPORTS*
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Crude Oil Imports**
Total -----------------------
Imports# Barrels Value Avg. Crude/
Year/ -------- -------------- Price Total
Month (Amounts in Billions) Per Bbl. (%)
-----------------------------------------------
2005
Jan. $ 159.099 0.323 $ 11.410 $35.35 7.2
===============================================
2004
Dec. $ 156.169 0.321 $ 11.760 $36.63 7.5
Nov. 156.738 0.326 13.435 41.15 8.6
Oct. 154.028 0.316 13.198 41.79 8.6
Sep. 148.796 0.304 11.421 37.62 7.7
Aug. 150.397 0.331 12.044 36.37 8.0
July 146.760 0.319 10.611 33.28 7.2
June 148.542 0.347 11.697 33.76 7.9
May 144.393 0.316 10.474 33.12 7.3
Apr. 142.973 0.312 9.668 31.00 6.8
Mar. 142.531 0.332 10.162 30.64 7.1
Feb. 138.293 0.288 8.395 29.17 6.1
Jan. 134.633 0.309 8.835 28.55 6.6
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2004
Total $1764.243 3.821 $131.700 $34.47 7.5
===============================================
2003 $1517.011 3.676 $99.167 $26.98 6.5
1998 1098.363 3.243 37.252 11.49 3.4
1993 713.058 2.543 38.469 15.13 5.4
1988 545.715 1.888 25.844 13.69 4.7
1983 323.874 1.294 38.184 29.51 11.8
1978 208.191 2.392 32.140 13.43 15.4
1973 89.342 1.393 4.593 3.30 5.1
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*Source: US Department of Commerce. **Not
seasonally adjusted. #Goods and services,
seasonally adjusted. MEMO ITEM: Crude oil
to goods-only imports: 1973 = 6.5%, 2004
= 8.9%.
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Employing the figures in the above tables, here's another way of assessing oil imports within the context of the nation's trade deficit (in approximate terms, because of the mixing of adjusted and unadjusted data). What would the deficit look like if the United States neither imported nor exported any crude oil?
In January, the goods-and-services deficit came in at $58.3 billion. With no US crude oil imports, the figure would have been $46.9 billion, or 19.6% lower. For all of 2004, zero oil imports would have lowered the cumulative deficit by $131.7 billion, or by about 21.3%.
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U.S. TRADE DEFICIT BY SELECTED
COUNTRIES/REGIONS (Ranked in
Order of 2005 Size. Amounts
in Billions of $s and Are
Not Seasonally Adjusted)
--------------------------------
2005 2004
Country/ ------------------
Region January December
--------------------------------
China 15.255 14.264
Japan 6.210 6.850
Canada 6.154 4.853
OPEC 6.053 5.816
Germany 3.547 4.246
Mexico 2.909 3.399
Korea 1.862 1.342
Italy 1.462 1.697
Taiwan 1.172 0.638
UK 0.755 1.279
--------------------------------
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U.S. TRADE DEFICIT BY SELECTED COUNTRIES/REGIONS
(Ranked in Order of Cumulative 2004 Size. Amounts Are
in Billions of $s and Are Not Seasonally Adjusted)
---------------------------------------------------------
2004 2003 % Chg.
Country/ ------------------- ------------------- 2004/
Region December Cumulative December Cumulative 2003
--------------------------------------------------------
China 14.264 161.978 9.883 124.068 30.6
Japan 6.850 75.195 5.760 66.032 13.9
OPEC 5.816 71.867 4.568 51.065 40.7
Canada 4.853 65.764 4.520 51.671 27.3
Germany 4.246 45.855 4.131 39.209 17.0
Mexico 3.399 45.068 3.113 40.648 10.9
Korea 1.342 19.829 1.416 13.157 50.7
Italy 1.697 17.378 1.355 14.854 17.0
Taiwan 0.638 12.887 0.851 14.152 -8.9
UK 1.279 10.442 1.094 8.967 16.4
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