International Trade (Exports, Imports, Trade Balance)

Importance: **

Definition: Tally of U.S. international trade in goods and services, or the difference between a country’s imports and exports. Exports and imports account for the balance or about 13% of the GDP. They are equal to the difference between exports and imports of goods and services. Net exports are also defined as the trade balance of the country. Imports deduct from GDP and exports add to the figure. Since the early 1980s, the U. S. has consistently experienced a trade balance deficit, i.e. net imports with imports exceeding exports.

Related Indicators: Net Exports (NIPA Accounts); the Current Account is equal to the net exports plus Net Factor Income from Abroad.

Source: Department of Commerce.

Frequency: Monthly.

Availability: About six weeks following the reported month.

Direction: Counter-cyclical as the trade balance tends to improve in recessions and worsen in periods of high growth

Timing: Coincident indicator

Volatility: Medium/Low

Likely Impact on Financial Markets:

Interest Rates: Modest

Stock Prices: Modest. Stock prices may fall if a significant worsening trade balance indicates a loss of competitiveness of domestic firms.

Exchange Rates: A worsening of the trade balance (a fall in net exports) may lead to an exchange rate depreciation required to restore competitiveness. However, a worsening trade balance may indicate high economic growth that is leading to higher imports; as interest rates tend to increase when growth is high, the exchange rate may appreciate following a worsening of the trade balance.

Ability to affect markets: Modest. Other indicators are stronger market movers.

Analysis of the Indicator: The trade balance, or the related concept of the current account, can be seen in two ways: either as equal to the difference between exports and imports of goods and services; or, as approximately equal to the difference between national savings and national investment. While a worsening of the trade balance is traditionally considered as a sign of competitiveness loss for the country, it may actually signal a strong economy where national investment is growing faster than national savings. In this sense, a worsening of the trade balance/current account may be good new about the economy.

The Bureau of the Census and the Bureau of Economic Analysis, through the Department of Commerce, announced on December 18, 1997 that total October exports of $80.0 billion and imports of $89.7 billion resulted in a goods and services deficit of $9.7 billion, $1.5 billion less than the $11.2 billion in September. revised. October exports were $1.9 billion more than September exports of $78.1 billion. October imports were $0.3 billion more than September imports of $89.3 billion.

In October, the goods deficit decreased $1.5 billion from September to $17.1 billion, and the services surplus increased $0.1

billion to $7.4 billion. Exports of goods increased to $58.0 billion from $56.4 billion, and imports of goods increased to $75.0

billion from $74.9 billion. Exports of services increased to $22.0 billion from $21.7 billion, and imports of services increased to $14.6 billion from $14.4 billion.

WEB Links

See the Dismal Scientist Homepage for charts, tables and analysis of the latest report.

The latest GDP report from BEA includes an analysis of net exports trends in the latest quarter You can chart net export, exports and imports and other NIPA data from the NIPA VISUALIZATION PAGE

You can see net exports, exports and imports charts with theEconomic Chart Dispenser

You can create customized net exports charts with the Economic Chart Maker Tip: type EXPORTS in the Label section of the form and choose the transformation of the data you are interested in.