WASHINGTON — The U.S. September trade balance surprised at a $41.5 billion deficit (the expectation was a $45 billion shortfall), as imports gained $3.4 billion but exports surged $5.6 billion.

Both sides of the trade report reflect in part the higher pricing for oil during the month. September oil exports posted new highs.

In imports, crude oil and related items were up $1.3 billion on a $4.52 price jump for imported crude to $98.88 on average. Imports of cell phones and related products surged $1.546 billion as the iPhone-5 came on line. As an important offset, services imports fell $600 million as royalty imports printed down $800 million on a cessation of payments for the Olympics broadcast rights.

The $5.6 billion exports gain was led by a $2.2 billion rise in oil and related, also a pricing effect. But soybeans continued to rebound at plus-$871 million and civilian aircraft was up $369 million.

Unadjusted, the trade gaps by country included: China at $29.1 billion after $28.7 billion in August, Japan $4.8 billion after $6.7 billion, and OPEC $7.1 billion after $8.1 billion.

Also, the unadjusted trade balance with South/Central America printed up $2.2 billion, its highest on record, after a $373 million surplus in August. Exports to South America were a record $16.2 billion in total , apparently heavily concentrated in oil. Exports to Colombia, where the U.S. typically runs a large gap, surged to $1.7 billion, a new high.

Overall, the trade data were better than expected and the August gap was revised lower to $43.8 billion, though possibly a temporary effect of oil pricing and flows. The Commerce Department had estimated a $45 billion deficit for September trade in the GDP data, so this report will add perhaps another 0.2 point to Q3 GDP.

 

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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