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U.S. trade deficit falls to six-year low in December on declining imports

Joseph Lazzaro — Wed, 11 Feb 2009 10:50:00 EST

Filed under: International Markets, Forecasts, Economic Data, Recession

Many economists agree the U.S.'s pronounced recession, and the global recession, to some degree, were triggered by a series of imbalances. One of those imbalances is correcting now.

The U.S. trade deficit declined again in December 2008, by 4%, to $39.9 billion -- the lowest level since February 2003 -- on a substantial decline in imports, the U.S. Commerce Department announced Wednesday.

Further, for all of 2008, the trade deficit narrowed to $677.1 billion from $700.2 billion in 2007. In 2008, exports increased 12% to $1.84 trillion, while imports climbed 7.4% to $2.52 trillion.

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November U.S. trade deficit falls to $40.4 billion on declining imports

Joseph Lazzaro — Tue, 13 Jan 2009 10:40:00 EST

Filed under: International Markets, Industry

There have been almost no positives in the U.S. recession that has resulted in millions of job losses, and also hurt corporate revenue and earnings, most economists agree.

But at least one metric has moved in the correct direction: the U.S. trade deficit, which declined 29% in November 2008 to $40.4 billion on a record decline in imports, the U.S. Commerce Department announced Tuesday.

Economists surveyed by Bloomberg News had expected the November 2008 trade deficit to total $51.5 billion.

Imports declined a record 12% to $183.2 billion -- the lowest level in more than two years -- pushed lower by a large drop in imported oil prices.

Exports dropped 5.8% to $142.8 billion, on declining demand for industrial supplies and capital goods. The October 2008 trade deficit was revised lower to $56.7 billion from the previously released $57.2 billion.

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November U.S. factory orders plunge 4.6%

Joseph Lazzaro — Tue, 06 Jan 2009 11:55:00 EST

Filed under: Bad News, Industry, Economic Data, Recession

U.S. factory orders plunged 4.6% in November 2008, the U.S. Commerce Department announced Tuesday, as companies pared-back operations on slackening demand, due to the continuing U.S. recession.

Economists surveyed by Bloomberg News had expected November 2008 factory orders to decline 2.5%. Factory orders decreased 6.0% in October 2008.

Factory orders have now declined for four consecutive months and have declined 15.2% in the past year.

Economist Peter Dawson said the November 2008 factory order data "is more evidence of continued, broad weakness in the U.S. economy, stemming from decreased demand from both U.S. and international sources."

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U.S. new home sales fall 5.3% in October to lowest level since 1991

Joseph Lazzaro — Wed, 26 Nov 2008 13:20:00 EST

Filed under: Forecasts, Housing, Recession

U.S. new home sales fell 5.3% to a seasonally adjusted, annualized pace of 433,000 in October -- the lowest annualized level since 1991, the U.S. Commerce Department announced Wednesday (pdf).

Economists surveyed by Bloomberg News had expected October new home sales to register a 450,000 annualized rate.

Further, new home sales are down 40.1% compared to a year ago. In 2007, 776,000 new homes were sold, compared to 1.05 million in 2006. And the median sales price for a new house decreased to $218,000 in October, a drop of 7% in the past 12 months.

Sales fell in two regions -- declining 18% in the West and 6% in the South. Sales rose 22.6% in the Northeast and 6% in the Midwest.

One bright spot: inventories declined 8% in October to 381,000 units, a roughly 11-month supply at the current sales pace. Inventories have now declined 25.7% in the past year, the largest decline since the federal government started tracking data in 1963.

October data is mixed

Economist Peter Dawson called the October new home sales stats a smorgasbord of data, some positive, some negative.

"We did see a substantial decline in inventories, so that's a positive. The problem is, the rate of new home sales is now so low, due to the recession and credit crunch, that it's still going to take a long time to work off inventories, which are still very high at 11 months," Dawson said.

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Trade deficit declines in September on plunging oil prices

Joseph Lazzaro — Thu, 13 Nov 2008 11:50:00 EST

Filed under: International Markets, Forecasts, Economic Data

There have been few bright spots as the United States attempts to battle back from almost a decade of policy errors, but one positive trend continued Thursday: the trade deficit continues to decline.

The U.S trade deficit narrowed in September to $56.5 billion -- its smallest total in almost a year -- as the plunge in oil prices decreased the nation's bill for imported oil, the U.S. Commerce Department announced Thursday. Economists surveyed by Bloomberg News had expected the September trade deficit to total $57.0 billion. The trade deficit totaled $59.1 billion in August.

Imports fell a record $12.5 billion to $211.9 billion in September, while exports declined a record $9.9 billion to $155.4 billion. Further, during the past year, the real trade deficit has declined 19.7%, with real imports declining 6% and real exports dipping 2.3%.

Economist Peter Dawson said the major factor in the continued reduction in the U.S. trade gap is the plunge in oil prices, but U.S. consumer behavior also is playing a role.

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Housing starts fall 6% in September to 17-year low

Joseph Lazzaro — Fri, 17 Oct 2008 11:10:00 EST

Filed under: Forecasts, Bad News, Economic Data, Housing, Recession

U.S. housing starts decreased 6.3% in September -- the U.S. Commerce Department announced Friday, as builders attempted to reduce supply amid the nation's worst housing slump in more than a generation. (pdf)

Housing starts fell to an 817,000 annual rate in September, the U.S. Commerce Department announced. It was the lowest housing start pace in 17 years. (pdf)

Economists surveyed by Bloomberg News had expected housing starts to total an 880,000 annualized rate in September. Housing starts for August were revised lower to 872,000 from 895,000.

Over the past four months, housing starts have averaged a 932,000 annual pace, down from 973,000 for the four months ending in August.

Further, single family home starts fell 12% to a 544,000 annualized rate in September, their lowest level in 16 years.

Also, building permits declined 8.3% in September to a 786,000 annualized rate -- a 27-year low.

In addition, housing starts are down 31.1% in the past year, single-family starts are down 42%.

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U.S. housing starts fall to 17-year low

Joseph Lazzaro — Wed, 17 Sep 2008 14:15:00 EST

Filed under: Bad News, Housing, Recession

U.S. housing starts fell again in August, indicating that the worst housing slump in a generation will continue to weigh on the U.S. economy.

Starts of new homes declined 6.2% in August to a seasonally-adjusted annual rate of 895,000, the U.S. Commerce Department announced Wednesday. It was the lowest new home start rate in 17 years (pdf).

Economists surveyed by Bloomberg News had expected housing starts to total a 950,000 annualized rate in August.

Meanwhile, starts of single-family homes fell 1.9% to a 630,000 annualized rate.

Economist Glen Langan said the housing market remains "a terrible market if you're trying to sell a home, and still a risky market if you're thinking of buying a home."

"Conditions vary by region, but in general the U.S. housing market remains in a deep slump. Unless you absolutely have to or you find your 'dream house,' it makes sense to a wait a few months to see if the market stabilizes, mortgage availability factors being equal," Langan said. "In most regions of the U.S. home prices and sales are falling and that's why we're seeing a declining rate of new home starts by home builders."

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Oil pushes July U.S. trade deficit higher, but exports shine

Joseph Lazzaro — Thu, 11 Sep 2008 11:45:00 EST

Filed under: International Markets, Forecasts, Industry, India, China, Brazil, Middle East, Economic Data

Your take on the July U.S. trade data may very well hinge on whether you tend to see a half-glass of orange juice as a glass half-empty or half-full.

The downside: the U.S. trade deficit increased 5.7% in July to $62.2 billion, the U.S. Commerce Department announced Thursday. Economists surveyed by Bloomberg News had expected a $58.0 billion trade deficit for July.

The upside: the non-petroleum trade deficit in goods declined 9.8% to $29.6 billion -- its lowest level in six years, the Commerce Department said.

Almost all of July's trade deficit increase was due to oil. So, does the July trade statistic constitute a modest victory, or something less?

"It means the nation's trade deficit picture is improving, just as long as we don't use any oil," economist Peter Dawson said. "Kidding aside, the non-oil component of the trade deficit continues to improve, and I'm emphasizing that dimension. The oil import component should decrease provided oil prices continue to moderate and Americans continue to cutback gasoline use, so the trend line at least through Q4 is a good one for the trade deficit."

Overall in July, imports rose 3.9% to $230.3 billion, and exports increased 3.3% to $168.1 billion. Strong performance areas for exports included airplanes, machinery, auto parts, computers and industrial materials.

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U.S. Q2 GDP of 3.3% likely to be fleeting

Joseph Lazzaro — Thu, 28 Aug 2008 09:55:00 EST

Filed under: Forecasts, Economic Data, Federal Reserve, Recession

A sluggish U.S. economy that grows at 3.3% in Q2? What's going on here?

The U.S. Commerce Department Thursday revised its Q2 GDP growth estimate to 3.3% from the previously-estimated 1.9%, but economist David H. Wang remains a skeptic regarding the appearance of an economic recovery.

"Don't write home or e-mail home that we have 'blue skies' ahead regarding the U.S economy because the skies remain uncertain and stormy looking. If you take away the export gains, the economy is still pretty weak," Wang said. "Also, one quarter does not a recovery make, and we'll get final data on Q2 GDP in September [September 26]."

Economists surveyed by Bloomberg News had expected the preliminary Q2 GDP statistic to total 2.7%. The U.S. economy grew at a 0.9% annualized pace in Q1 and contracted 0.2% in Q4 2007.

Q2 GDP data fleeting?

Wang said an improvement in exports and inventory accumulation strengthened GDP in Q2, but other factors suggest "it will be difficult, if not impossible to match that GDP growth rate in Q3 and Q4."

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The housing slump may continue well into 2010

Joseph Lazzaro — Tue, 19 Aug 2008 10:57:00 EST

Filed under: Forecasts, Bad News, Housing, Recession

Picture this: a U.S. neighborhood where no homes are being constructed, for miles.

In the current economic climate, the above could be a snapshot in any region of the country (or, sadly, in every region of the country).

U.S. housing starts fell to a seasonally-adjusted annual rate of 965,000 in July, the U.S. Commerce Department announced Tuesday (pdf). It was the lowest level for housing starts in 17 years.

Economists surveyed by Bloomberg News had expected July U.S. housing starts to total 950,000.

Further, housing starts have declined 29.6% in the past 12 months. Economist Glen Langan told BloggingStocks Tuesday he knows why.

"It doesn't take a Harvard mathematician to deduce this one. Builders are competing for sales with the large supply of foreclosed homes, as well as with home owners in good standing with banks, who are trying to sell their homes," Langan said. "So the great U.S. homebuilder pullback continues."

The U.S. economy is growing at a minuscule rate or is already in recession. Job growth, save a few sectors, is non-existent. Bank mortgage qualifying requirements are at their most rigorous levels in a decade. Investors / readers ask, 'where are the buyers going to come from to spark a rebound in the housing sector?'

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Summer surprise: U.S. trade deficit narrows in June

Joseph Lazzaro — Tue, 12 Aug 2008 12:57:00 EST

Filed under: Good news, Economic Data

In this market and this economy, you take the good news where you can get it.

Today, we got some good news: the U.S. trade deficit narrowed in June to $56.8 billion on record exports and a dip in non-oil imports, the U.S. Commerce Department announced Tuesday. Economists surveyed by Bloomberg News had expected the June trade gap to be $61.5 billion.

Exports surged 4% in June to a record $164.4 billion, the largest gain in four years. Imports increased 1.8% to a record $221.2 billion, inflated by sky-high oil prices. Oil, which traded at about $113.65 per barrel on Tuesday at mid-day, is up about 360% since 2003.

U.S. export activity has been a silver lining in the nation's otherwise anemic economy. The trade deficit has been declining for about two years, aided by a weaker dollar and demand for products in emerging market countries.

A stronger U.S. economy in Q2?

Economist David H. Wang told BloggingStocks Tuesday the June trade deficit statistic "was a really pleasant surprise," but he still wants to lower expectations.

"The high export number is the standout, and it's one that, if it continues, implies a higher rate of GDP growth for the U.S. economy in Q2, but let's not jump the gun. Economists sense there's a global economic slowing going on, exports may have peaked as a result, so this large increase in June may prove to be transitory," Wang said.

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Economy expanded modestly in Q2, but contracted in late 2007 -- Fed not expected to move

Joseph Lazzaro — Thu, 31 Jul 2008 09:50:00 EST

Filed under: Forecasts, Industry, Economic Data, Housing, Federal Reserve, Recession

There have been few positive data points for the U.S. economy of late, and a modest GDP report is hardly a cause for a celebration, but all things considered, the Federal Reserve, business executives and investors will take it, mixed bag as it is.

The U.S. economy grew at a modest 1.9% pace in Q2, the U.S. Commerce Department announced Thursday, as the world's largest economy received a mild, if temporary, boost from federal tax rebate checks. Still, economists surveyed by Bloomberg News had expected the economy to grow at a 2.4% rate in Q2.

Further, revised Commerce Department data indicates the economy contracted 0.2% in Q4 2007, the first drop in real gross domestic product since the 2001-2002 recession. The U.S. economy grew 0.9% in Q1.

Economist David H. Wang, not a part of the Bloomberg News survey, told BloggingStocks Thursday the Q2 U.S. GDP report is a mixed bag, concerning overall U.S. economic health.

"On the one hand, the 1.9% figure is not that bad. I actually am a little surprised that it was that high, given high energy prices and the pullback in retail sales," Wang said. "On the other hand, you can see in the Q2 data the continued drag of the housing sector's recession, with the Commerce Department now saying the economy contracted 0.2% in Q4. Housing is taking at least 1 percentage point off GDP, probably closer to 1.2-1.3 percentage points, and it's hard to project a sustained recovery without a turnaround in housing, given the sectors it affects."

Meanwhile, inflation inched higher in Q2. The personal consumption expenditure price index increased to a 4.2% annual rate, with core prices, which exclude the often-volatile food and energy component, rising to 2.1%, slightly above the U.S. Federal Reserve's target zone. Few economists expect the the PCE data to influence the Fed at its meeting next Tuesday: the Fed is expected to keep its benchmark, short-term interest rate the same at 2%.

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May U.S. business inventories increase 0.3%, below estimate

Joseph Lazzaro — Tue, 15 Jul 2008 15:50:00 EST

Filed under: Industry, Economic Data, Recession

U.S. business inventories rose a lower-than-expected 0.3% in May, the U.S. Commerce Department announced Tuesday.

Economists surveyed by Bloomberg News had expected March 2008 inventories to rise 0.4%.

Further, inventories are now up 5.2% from May 2007, the Commerce Department said. The April business inventory statistic was revised higher to 0.5%.

Meanwhile, the inventory-to-sales ratio declined to 1.24. A year ago, the ratio was 1.26.

Economist David H. Wang told BloggingStocks Tuesday the May inventory data can be interpreted two ways, with with positive or negative dimensions, depending on how one views the current corporate stance toward the U.S. economy, and the prospects for economic growth in the quarters ahead.

On the one hand, businesses are keeping inventories at a bare minimum -- a fact that typically is bearish, short-term, for the U.S. economy, Wang said.

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May U.S. trade deficit falls to $59.8 billion on record exports

Joseph Lazzaro — Fri, 11 Jul 2008 10:10:00 EST

Filed under: Other Issues, Good news, Industry, Oil

The U.S. trade deficit fell to $59.8 billion in May (PDF file), the U.S. Commerce Department announced Friday, as exports rose at a much faster pace than imports in the month.

Economists surveyed by Bloomberg News had expected the May trade deficit to be $62.1 billion. The April trade deficit totaled $60.2 billion; March, $56.5 billion.

In May, exports increased to 0.9% to $157.5 billion. Imports increased 0.3% to a record $217.3 billion, with imported petroleum increasing 6.5% to $31.2 billion - - a cost component that accounted for almost the entire increase in the import total.

During May, the average price for a barrel of crude oil increased a record $9.47 to a record $106.28, the Commerce Department said.

U.S. exports shine again in May

Economist David H. Wang told BloggingStocks Friday the May trade deficit report "represents good news on an otherwise very sub-par economic landscape. Once again, as in April, if you take away oil and control for inflation, we can see a continued downward track in the deficit, led by rising exports," Wang said. "International demand for U.S. goods is a bright spot in our economy. Without it, we would be in a pronounced recession."

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May U.S. factory orders rise 0.6%, in-line with estimate

Joseph Lazzaro — Wed, 02 Jul 2008 11:50:00 EST

Filed under: Forecasts, Industry, Economic Data, Recession

Factory orders increased 0.6% in May, the U.S. Commerce Department announced Wednesday, on rising demand for computers and defense equipment. It was the third consecutive monthly rise in factory orders, the Commerce Department said. Excluding the often-volatile transportation component, factory orders increased 0.4%.

Economists surveyed by Bloomberg News had expected May factory orders to increase by 0.6%. Factory orders increased a revised 1.3% in April.

Economists follow the factory orders statistic because it provides one of the most comprehensive surveys of advance orders for durable goods -- how busy factories are likely to be in the period ahead. Factory orders also are a major value-added component of the U.S. economy.

In May, new orders rose 1.2%, bookings increased 0.6%, shipments rose 0.1%, and unfilled orders increased 0.1%. Also, the inventories-to-shipments ratio was virtually unchanged in May at 1.23, compared to 1.22 in April.

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New home sales fall 2.5% in May to 512k annual rate

Joseph Lazzaro — Wed, 25 Jun 2008 12:10:00 EST

Filed under: Bad News, Economic Data, Housing, Recession

New home sales in the U.S. fell 2.5% to a seasonally adjusted, annualized pace of 512,000 in May, with sales in the Western U.S. plunging to a 26-year low, the U.S. Commerce Department announced Wednesday (pdf).

Economists surveyed by Bloomberg News had expected May new home sales to register a 515,000 annualized rate.

Sales are still down about 40% compared to a year ago. In 2007, 776,000 new homes were sold, compared to 1.05 million in 2006.

Meanwhile, inventories rose to a 10.9-month supply in May at the current sales pace, compared to a 10.6-month supply in April. A typical, healthy housing market has a three to four month supply of homes for sale.

Sales fell in three regions: 11.6% in the West, 7.9% in the Northeast, and 5.1% in the Midwest. Sales rose a scant 0.4% in the South. Further, the West's 114,000 annualized sales pace was that region's slowest sales pace in 26 years.

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U.S. durable goods orders are flat in May, in-line with estimate

Joseph Lazzaro — Wed, 25 Jun 2008 09:26:00 EST

Filed under: Industry, Economic Data

U.S. durable goods orders were flat in May, as demand for airplanes and defense goods offset weakness in machinery and metals, the U.S. Commerce Department announced Wednesday.

Economists surveyed by Bloomberg News had expected May durable goods orders to remain flat. Durable goods orders decreased a revised 1.0% in April.

Equally significant, excluding the often-volatile transportation component, durable goods orders fell 0.9% in May. Also, excluding defense orders, durable goods orders declined 0.6%.

In May, shipments fell 1.1%, unfilled orders increased 0.9%, inventories increased 0.4%.

By category, in May orders for civilian aircraft jumped 10.3%, transportation increased 2.6%, computers and electronics climbed 2%, motor vehicles and parts declined 3.3%, transportation goods dropped 3.7%, and machinery declined 5.3%.

Foreign demand continues

Economist David H. Wang told BloggingStocks Wednesday exports continue to offset sluggish domestic demand conditions. "Export demand continued in the May report. It's helping keep U.S. businesses and factories busy during this down period in domestic demand," Wang said.

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May housing starts total 969k annual pace, slowest in 17 years

Joseph Lazzaro — Tue, 17 Jun 2008 09:43:00 EST

Filed under: Bad News, Economic Data, Housing, Recession

U.S. housing starts decreased 3.3% in May, the U.S. Commerce Department announced Tuesday, as builders attempted to reduce supply amid the nation's worst housing slump in a generation.

Housing starts totaled a 969,000 annual rate in May, the Commerce Department said. It was the lowest housing start pace in 17 years.

Economists surveyed by Bloomberg News had expected housing starts to total a 985,000 annualized rate in May.

Further, housing starts are down 32.1% in the past year and single-family home starts are down 41.2%. Over the past four months, housing starts have averaged a 1.02 million annual pace.

Meanwhile, building permits, a measure of future construction, decreased 1.3% to a 969,000 annualized rate in May. Single-family permits decreased 4%. Building permits have declined 36.3% in the past year.

Economist Glen Langan told BloggingStocks Tuesday many potential homebuyers are remaining in wait-and-see mode, as the housing slump persists.

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U.S. business sales jump, outpace inventories in April

Joseph Lazzaro — Thu, 12 Jun 2008 13:45:00 EST

Filed under: Industry, Economic Data

U.S. business sales increased 1.4% in April - - the fastest pace in five months - - outpacing inventory growth and leaving businesses with small inventory levels, the U.S. Commerce Department announced Thursday.

Sales have increased 6.8% since April 2007.

Meanwhile, inventories increased a modest 0.5% in April, above the 0.3% consensus estimate of economists surveyed by Bloomberg News. Inventories have increased 5.4% since April 2007.

Further, the April business inventory-to-sales ratio declined to 1.25, with the typical company now possessing about a 38-day supply of goods in storage/inventory rooms. A year ago, in April 2007 the inventory-to-sales ratio was 1.27.

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April U.S. trade deficit rises to $60.9 billion on high oil prices

Joseph Lazzaro — Tue, 10 Jun 2008 09:45:00 EST

Filed under: Industry, Economic Data, Commodities, Oil, Agriculture

The U.S. trade deficit rose to $60.9 billion in April, the U.S. Commerce Department announced Tuesday, as the rising cost of imported oil offset gains in goods exported.

Economists surveyed by Bloomberg News had expected the trade deficit to be $59.5 billion. Also, the March trade deficit was revised lower to $56.5 billion from the previously announced $58.2 billion.

In April, imports increased to 4.5% to $216.4 billion, with imported petroleum driving up the total. The United States paid a record $96.81 average price for a barrel of oil during the month. Exports increased 3.3% to $155.5 billion, boosted by sales of commercial aircraft, autos, machinery, and agricultural equipment.

Meanwhile, the nominal April trade deficit, which controls for inflation, fell to $46.9 billion - - its lowest level in about 5 years.

Bad news, Good news

Economist David H. Wang told BloggingStocks Tuesday he's emphasizing the good news in the report which he argues is the more substantive and telling dimension of the report.

"If you take away oil and control for inflation, we can see a continued downward track in the trade deficit, led by rising exports," Wang said. "As we saw in the February and March trade data, international demand for U.S. goods is a bright spot in our economy. Without it, would will be in a pronounced recession."

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