WASHINGTON - The U.S. November trade report was far better than expected, showing higher U.S. exports for another month and implying the trade sector will add further to real growth in Q4. Real GDP estimates will be revised higher, probably to +3% or so, as oil and aircraft exports propel growth.
The November trade balance posted -$34.3 billion, after a revised -$39.3 billion in October, both better than forecasts.
Exports advanced $1.7 billion and imports fell $3.4 billion on -$3.4 billion in oil and related items. This virtuous combination was the best showing since -$33.9 billion in October 2009 as the U.S. came out of recession. But in 2013 the improvement reflected not weak demand but better trade.
The trade balance improvement was not only due to oil pricing (down more than $5 a barrel on average for imports). Volume of imports also was lower as the U.S. becomes more energy independent.
The move to more domestic energy usage can be seen in the patterns of imports. Imports of capital goods and automobiles & parts were new highs, illustrating demand in a growing economy. But imports of petroleum and industrial supplies were at their lowest levels since November 2010.
Exports of goods were new highs and reflected +$600 million in civilian aircraft and engines, +$191 million in pharmaceuticals, and +$1 billion in oil & related.
Services exports also gained more than imports (+$300 million against +$0.1 billion), contributing to the trade gap narrowing. Travel and passenger fares mainly accounted for the advance.
Unadjusted trade balances by country showed China at -$26.9 billion after -$28.9 billion in October, Japan at -$4.8 billion after -$6.4 billion, and OPEC at -$4.8 billion after -$5.6 billion.
All of Europe was back to a normal range at -$10 billion balance after an elevated -$15.9 billion in October. In January, statistics for Latvia will be added into the Euro Area.
The real trade balance was -$48.7 billion a month on average in Q3, and the October-November average is just -$45.8 billion, a massive $3 billion improvement. That is why Q4 growth estimates will be upped.
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