Posted by Joseph Y. Calhoun, III

The Trade defict fell in October primarily due to a drop in oil prices:

The U.S. monthly international trade deficit decreased in October 2009, according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $35.7 billion (revised) in September to $32.9 billion in October, as exports increased more than imports. The previously published September deficit was $36.5 billion.

Exports

Exports of goods and services increased $3.5 billion in October to $136.8 billion, mostly reflecting an increase in goods exports. Services exports also increased.

???? The increase in goods exports was mostly accounted for by increases in capital goods, consumer goods, and other goods.

???? The increase in services exports was mostly accounted for by an increase in other private services (which includes items such as business, professional, and technical services, insurance services, and financial services).

Imports

Imports of goods and services increased $0.7 billion in October to $169.8 billion, mostly reflecting an increase in goods imports. Services imports also increased.

???? The increase in goods imports was more than accounted for by increases in capital goods and consumer goods.

???? The increase in services imports was mostly accounted for by an increase in passenger fares.

Goods by geographic area (not seasonally adjusted)

???? The goods deficit with Canada increased from $1.5 billion in September to $2.0 billion in October. Exports increased $0.7 billion to $19.2 billion, while imports increased $1.2 billion to $21.2 billion.

???? The goods deficit with China increased from $22.1 billion in September to $22.7 billion in October. Exports increased $1.0 billion to $6.9 billion, while imports increased $1.6 billion to $29.5 billion.

???? The goods deficit with the European Union decreased from $5.5 billion in September to $4.9 billion in October. Exports increased $2.5 billion to $20.6 billion, while imports increased $1.8 billion to $25.5 billion.

The balance isn’t the important thing to me. Increasing trade is a good sign even if it means a higher deficit. We can’t really get rid of our deficit unless we stop importing oil anyway and that seems highly unlikely anytime soon. The rest of the deficit is manageable.