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Friday, October 9, 2009

Trade Balance Breakdown

Bloomberg details:
The U.S. trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged.

The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said today in Washington. A rebound in auto making contributed to a jump in exports to Canada, while a drop in the number of barrels of petroleum bought abroad swamped an increase in fuel prices.
The chart below shows that "jump" in exports (i.e. no jump) during August.

More broadly, the following chart shows the improved trade budget deficit over the longer term. It looks like a case of the old "addition by the elimination of subtraction" (a greater subtraction of imports rather than improvement in exports).

Source: Census