For the month of December, import consumption and export growth continued to fall, as weak worldwide economic growth wrecked havoc on international trade. According to the monthly trade balance report released by the Commerce Department, exports fell 6% in December, down $8.5 billion to a seasonally-adjusted $142.3 billion. Imports also fell, by 5.5%, with consumption of foreign goods falling $10.2 billion to a seasonally-adjusted $183.9 billion.
The trade deficit, net imports and exports, also fell, to $39.9 billion from a revised $41.6 billion in November. The number is at a new six-year low.
It seems like US consumers are cutting back on discretionary spending and consumption at a rapid rate, while US manufacturers are suffering from a stregthening dollar (by default) and a cutback in global, non-US consumption as well. Exports, the driving force of our economy for years now, has suffered a cripiling setback in the last quarter, which doesn’t paint a nice picture for the future.
Imports measured in current dollars dropped 5.5% to a seasonally adjusted $173.7 billion. That’s the lowest since September 2005.
Nominal exports of goods and services fell 6% from the previous month to a seasonally adjusted $133.8 billion, in what was the lowest seen since May 2007. Exports of goods alone fell a record 8.6%, despite a doubling of exports of civilian aircraft.
Real imports of goods — which are adjusted for inflation — fell 1.6%, while exports of goods fell 6%. The real trade deficit in goods rose 8.1% and has increased in four of the past six months.
Combined, the deficit of $386 billion for petroleum and the deficit of $266 billion with China accounted for 96% of the 2008 U.S. trade deficit.
Exports of capital goods decreased 1.5% to $36 billion, despite a doubling in aircraft exports to $4 billion. Exports of semiconductors and industrial engines fell sharply.
Exports of autos fell 14% to $7.7 billion, the lowest in four years.
Exports of industrial supplies dropped 16.7% to $22.7 billion on a lessening in demand for chemicals, plastics and petroleum products alike.
As for consumer goods, December’s exports fell 6.2% to $12.3 billion. Demand for drugs and household appliances waned in the face of softening economic conditions around the world.
Exports of foods and feed fell 9.2% to $6.9 billion on lower exports of wheat and corn.
December’s exports of services also fell, easing 0.4% to $45.1 billion.
Meanwhile, imports of capital goods decreased 4.3% on lower shipments of electronics.
Imports of autos and parts sank 9.3% to $14.9 billion, marking the lowest level since May 1999.
Imports of industrial supplies fell 11.6% to $42.9 billion, the lowest in more than three years, on the weakness in oil prices.
Imports of consumer goods came in 1.3% lower at $36.4 billion. Rising demand for drugs largely offset lower shipments of textiles and apparel.
Imports of foods and feeds fell 2.4% to stand at $7.1 billion.
Imports of services dipped 0.4% to $33.4 billion.
For all of 2008, the US trade deficit shrank by $23.2 billion, a 3.3% decrease from 2007. Exports increased 12% to $1.84 trillion, while imports rose 7.4% to $2.52 trillion. In real terms, imports fell 3.3% in 2008 while exports rose 6.5%.
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