– February 6, 2019

The U.S. trade deficit decreased slightly in November, falling to $49.3 billion. The narrower deficit reflects a smaller deficit for trade in goods ($71.6 billion deficit vs. $78.3 billion in October) and a smaller surplus in services ($22.3 billion versus $22.6 billion in October).

Exports of goods and services fell to $209.9 billion with goods exports falling to $140.3 billion from $141.5 billion and services exports dropping to $69.5 billion from $69.7 billion in the prior month. Imports of goods and services fell to $259.2 billion with goods imports dropping to $211.9 billion from $219.8 billion while services imports rose to $47.3 billion from $47.1 billion.

Within the goods area, the U.S. ran deficits in all six categories of goods in November (see chart). The largest deficit was in nonautomotive consumer goods, where exports of $17.0 billion and imports of $53.1 billion resulted in a net deficit of $36.1 billion. The next-largest deficit within goods was automotive products with a deficit of $19.8 billion followed by capital goods ($8.9 billion), other goods ($3.9 billion), foods, feeds, and beverages ($1.7 billion) and industrial supplies and materials ($0.1 billion).

Within services, the U.S. ran surpluses in six of the nine categories tabulated. The largest surplus was in financial services with exports of $9.7 billion and imports of $2.7 billion resulting in a surplus of $7.0 billion. That was followed by a surplus of $6.6 billion for intellectual property, $5.3 billion for travel, $4.4 billion for other business services, $1.9 billion for maintenance and repair services, and $0.3 billion for telecommunications, computer, and information services.  There were services deficits for transportation ($1.7 billion), insurance ($1.4 billion), and government ($0.3 billion).

Regionally, the U.S. ran a $45.9 billion deficit with Pacific Rim countries led by a $37.9 billion deficit with China, versus a $52.0 billion for the region and $43.1 billion deficit with China in October. There were deficits of $18.4 billion with Europe and $7.3 billion with North America in November. The U.S. had a trade surplus with South and Central America ($5.4 billion). Data for regions and countries are not seasonally adjusted.

International trade remains a contentious topic with ongoing trade disputes between the U.S. and several trading partners. The high level of uncertainty over trade policy is being noted in recent surveys of business leaders as a rising concern and is contributing to uncertainty regarding the outlook for 2019. That rising concern could contribute to more-cautious hiring and capital investment for some industries and may pose a threat to the broader economic outlook for 2019.

Robert Hughes


Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.

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