The trade deficit jumped $3.8 billion from last month as reported in the Trade in Goods and Services for December 2009 U.S. Commerce report.
Total December exports of $142.7 billion and imports of $182.9 billion resulted in a goods and services deficit of $40.2 billion, up from $36.4 billion in November, revised.
December exports were $4.6 billion more than November exports of $138.1 billion. December imports were $8.4 billion more than November imports of $174.5 billion.
At this point, expect Q4 2009 GDP revisions. We predicted strong downward revisions to Q4 GDP and noted yesterday's wholesale inventories imply a revision, (never mind the original inventory bump was all farm products).
So, if anyone reads an analysis claiming this sudden jump in the trade deficit is just inventory building, uh, don't think so!
Here are imports vs. exports of goods from the official start of this recession:
While increases in exports is great, our lovely globalists refuse to focus on the fact imports do subtract from the domestic economy, especially for jobs.
The below graph are services:
Services is unfortunately not broken down and even worse, guest workers in this country are counted as exports. But this is a place where one can extrapolate a hint on how much offshore outsourcing is occurring.
The trade deficit for 2009 is -$380.7 billion. Recall trade deficits subtract from U.S. GDP.
Oil did jump 9.2% in volume and you can see this best in exhibit 9 of the attached document. See Exhibit 7 for one of the weirdest increases, non-monetary gold exports. 1,442 million for December, up from 983 million in November and 459 in October. I haven't paid any attention to this so, I point it out because it's such a large jump. For analysis, I'll leave it up to those who wish to comment.
I have an even weirder one to dig into. Below are exports to China:
What is that? See the sudden spike and as far as I am aware, we export debt to China. I'll try to update this post for answers on this one if I find them. Annual balance of payments with China is -$226.8 billion.
Update: I emailed Economist Charles McMillion on the China exports increase and here is the answer:
About $450 million of the December increase was for large passenger jets --
which also reduced China's record ATP surplus with the US in November. They likely took delivery, at least officially, of a couple of Boeing jets in December to dress up their annual trade figures. Another near $200 million was for various forms of organic chemicals -- mostly packing equipment such as styrene. It's likely just end-of-year bookkeeping that will not last.
Thank you Dr. McMillion and this goes to show how important it is to make some things, like air-o-planes, in the U.S.