WASHINGTON — The U.S. international trade gap narrowed to $51.1 billion in January from a slightly revised $59.9 billion in December, a much smaller gap than the $57.0 billion deficit expected by the Bloomberg consensus and a $57.5 billion gap expected by an MNI survey, data released by the Commerce Department Wednesday morning showed.
The December gap was the widest since 2008, so the narrower January gap is simply a return to a more normal level. Seasonal adjustment was a factor in December's widening, and the reverse occurred in January, with seasonal factors turning an unadjusted widening into a narrower gap.
Here are the key findings from the release:
- Imports fell sharply on declines in capital goods and industrial supplies, the latter led by a sharp decline in crude oil imports. The unadjusted barrel price of crude oil was the lowest in over two years, continuing the downward trend in recent months.
- Exports rebounded from a December dip, led by foods and feed, autos and consumer goods.
- The unadjusted goods trade gap actually widened in January to $76.3 billion from $73.8 billion in December, so seasonal adjustment factors accounted for the seasonally adjusted narrowing.
- The overall BOP goods gap narrowed to $73.3 billion from $81.5 billion in December, while the services surplus widened to $22.1 billion. The petroleum gap narrowed to $900 million in January from $1.2 billion in December, while the nonpetroleum goods gap narrowed to $71.2 billion from $79.1 billion.
- The unadjusted bilateral trade gaps narrowed with all the major trading partners. The gap with China narrowed to $34.5 billion in January from $36.8 billion in December. At the same time, the gap with the EU narrowed to $11.7 billion from $15.1 billion. The gap with Canada was cut in half to $0.8 billion from $1.4 billion, while the gap with Mexico narrowed to $5.8 billion from $7.7 billion.
- Most interesting is the narrower Canada gap, which has improved noticeably from January 2018, when it was $3.7 billion, suggesting tariff action has been partially successful at trimming the deficit.
