WASHINGTON — The U.S. October trade report was about as expected, showing better U.S. exports and implying the trade sector will add to real growth in Q4.
The October trade balance posted -$40.6 billion, better than the revised -$43 billion in September. Imports were up $1 billion and exports were up $3.4 billion to new highs.
The overall real trade gap stands about $0.4 billion narrower in October than the Q3 average. This means trade will add to growth in the GDP calculations -- something private economists already assumed.
October imports gained on oil-related items posting +$0.8 billion and pharmaceuticals +$565 million. These data did not suggest any last minute pre-holiday surge in basic inventories. In fact, a 2%+ drop in the unit price of crude oil probably was responsible for the approximately 2.1% surge in imported crude volume.
The export rise reflected +$1 billion in chemicals/petroleum, +$1.4 billion in art/jewels, and +$406 million beans and +$296 million corn in foodstuffs. The overall gain came despite -$564 million in aircraft (Boeing Corp. had two fewer overseas deliveries of jet aircraft).
As U.S. costs and prices continue to rise at a modest pace, it appears that U.S. goods are more competitive. Exports are at new records, while imports are at March 2012 levels. Even services net exports gained.
Unadjusted trade balances by country showed China at -$28.9 billion after -$30.5 billion in September, Japan at -$6.4 billion after -$5.5 billion, and OPEC at -$5.6 billion after -$5.9 billion. Exports to China, Canada, and Mexico were new records.
In contrast, imports from the European Union were new records and the unadjusted deficit was the highest ever at -$14.3 billion. This number logged -$8 billion in September. The gain could reflect the American need for luxury products ahead of the holidays. In October 2012, the balance with the EU widened half as much, by $2.7 billion to -$10.7 billion.
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