Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Trade Deficit in Goods and Services Came in at $43.4 Billion in October
Posted Under: Data Watch • Trade

 
Implications: The trade deficit declined slightly in October as exports rose a bit faster than imports. But they both rose, which means the total volume of US trade with rest of the world (exports + imports) hit a new all-time record high. Meanwhile, on the import side, the key trend of the past several years remains intact: non-petroleum imports hit a new record high, reflecting solid growth in US purchasing power, while petroleum imports kept falling. Higher energy production, due to hydraulic fracturing, horizontal drilling, and seismic imaging, is transforming our trade relationship with the rest of the world. Nine years ago, back in October 2005, the US imported 16 times as much petroleum product as it exported. Since then, petroleum product exports are up 577% while imports are up only 3%. So now, petroleum product imports are only 2.4 times exports. This remarkable transformation was not because of government support, extended unemployment benefits, or QE, it was due to American innovation and entrepreneurship. Now policymakers are helping this trend, with the government giving two companies permission to ship condensate and appearing to look the other way as others start to ship crude. The US is moving toward a petroleum trade balance and perhaps even surpluses in the next few years. In the meantime, as a result of today's numbers, it looks like overall net exports will be a mild drag on real GDP growth in Q4, but we still expect an overall growth rate of roughly 2.5%. In other recent news, new claims for unemployment insurance fell 17,000 last week to 297,000. Continuing claims for regular state benefits increased 39,000 to 2.36 million. Looks like we're set up for another month of solid job growth in December.

Click here for a PDF
Posted on Friday, December 5, 2014 @ 12:05 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.