There were two news releases this morning related to international trade. First, the BEA reported on the November trade deficit:
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total November exports of $109.3 billion and imports of $173.5 billion resulted in a goods and services deficit of $64.2 billion, $3.9 billion less than the $68.1 billion in October, revised. November exports were $1.9 billion more than October exports of $107.4 billion. November imports were $2.0 billion less than October imports of $175.5 billion.
Because of the volatility of the price of oil over the past year, it’s informative to take a look at imports excluding petroleum products, as well. Over the first 11 months of 2005 the US imported $1,592bn of non-oil goods and services, compared to $1,446bn of non-oil goods and services over the same period in 2004, an increase of 10%. Exports also grew by 10% in 2005 compared to 2004, but because the value of exports was much smaller than the value of imports to begin with, the trade deficit has also risen by about 10%.
The second news release is the BLS data for December import and export prices. From the news release:
The U.S. Import Price Index fell 0.2 percent in December, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline followed a 1.8 percent decrease in November and was again led by lower petroleum prices.
…Overall import prices rose 7.9 percent for the year ended in December, which followed a 6.7 percent increase over the prior 12 months, and was the largest advance over any calendar year since 1987. Despite declining the past three months, the price index for petroleum increased 42.5 percent for the year following a 30.3 percent advance in 2004. Prices for nonpetroleum imports increased 2.4 percent for the December 2004-2005 period after rising 3.7 percent over the previous 12 months.
For comparison, note that the price index on domestic production excluding food and energy rose at an annualized rate of about 2.7% over the first three quarters of 2005, according to NIPA data. The fact that prices for non-oil imported goods and services rose a bit more slowly than prices on domestically produced items may be due to the fact that the trade-weighted dollar exchange rate was slightly stronger in 2005 than in 2004. The stronger dollar in 2005 helped to keep import prices down a bit.