The U.S. November 2013 monthly trade deficit plunged -12.9% from last month due to a massive drop in oil imports. While the press headlines blare November's $34.25 billion trade deficit is at a four year low, what they are not reporting is just last June the deficit also dropped suddenly and very close to this figure.
Exports increased just 0.9% while imports dropped by -1.4%. Graphed below are imports and exports graphed and by volume, note the global trade collapse in 2009 due to the recession. Imports are in maroon and exports are shown in blue, both scaled to the left.
This month's drop doesn't appear to be a global slowdown and has much more to do with a sudden decline in petroleum and fuel related imports. Oil or end use petroleum dropped -22.1% from last month to a $15.2 billion deficit. Petroleum related exports increased $700 million while imports decreased by -$3.6 billion. Crude oil by itself declined over -$2.5 billion in imports this month. The November trade deficit should help boost GDP as did June's plunge with Q2. We showed in this post how oil imports are becoming less and less of the total trade deficit, so this month's deficit plunge isn't really a surprise.
A piece of bad news is an increasing deficit with advanced technology products. This month the deficit was $9.3 billion and shows how much offshore outsourcing has impacted advanced technology. Worse than that, instead of moving advanced technology manufacturing back to U.S. shores the plan is to reclassify the supply chain so these goods made abroad can be (wrongly) counted as U.S. products. Along with an increasing trade deficit in advanced technology products, this month saw a $1 1 billion increase in automotive related imports.
The China trade deficit is still on track to hit yet another annual record and this month maintained it's highs with a not seasonally adjusted -$26.9 billion China trade deficit The China trade deficit alone was 52.5% of the not seasonally total goods deficit, on a Census accounting basis. The U.S. hit a new record annual 2012 $315 billion trade deficit. The 2013 the trade deficit with China to date is -$294 billion. This means if December's deficit is more than $21 billion, 2013 will be yet another new record.
We should also mention the expanding trade deficit with South Korea. The South Korean trade agreement went into effect March 15, 2012. This month the deficit was -$1.2 billion and annually is almost -$20 billion. The below chart, not seasonally adjusted and thus highly cyclical, shows the result of the South Korean trade treaty so far. The estimates currently are 40,000 jobs have been lost.
Here are other trade deficit overviews, data unrevised.