There were just two major reports released this past week:the Commerce Department report on our International Trade for September, and the September report on Wholesale Trade, Sales and Inventories from the Census Bureau...
September Trade Deficit Rose 4.9% on Higher Imports of Cars, Cellphones & Oil
Our trade deficit rose by 4.9% in September as both the value of our exports and the value of our imports increased, but our imports increased by more...the Commerce Dept report on our international trade in goods and services for September indicated that our seasonally adjusted goods and services trade deficit rose by a rounded $2.9 billion to $61.5 billion in September, from a revised August trade deficit of $58.7 billion, which had previously been reported at a 34 month low of $58.3 billion...the value of our exports rose by a rounded $5.7 billion to $261.1 billion in September, on a $5.3 billion increase to $176.7 billion in our exports of goods, and a $0.3 billion increase to $84.4 billion in our exports of services, while our imports rose by a rounded $8.6 billion to $322.7 billion, on a $7.0 billion increase to $263.0 billion in our imports of goods and a $1.5 billion increase to $59.6 billion in our imports of services... prices for our exports averaged 0.7% higher in September, so part of the increase in the value of this month's exports was due to higher prices, and real exports likely only rose by about 1.5%, while import prices were just 0.1% higher, meaning that our real imports were less than the nominal change reported here by that small percentage, or that real imports probably rose about 2.6%...
The increase in our September exports of goods was led by higher exports of industrial supplies and materials and of foods and feeds, even as our exports of all end use categories increased.... referencing the Full Release and Tables for September (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials rose by $1,447 million to $61,891 million on a $589 million increase in our exports of petroleum products other than fuel oil, a $423 million increase in our exports of crude oil, and a $300 million increase in our exports of fuel oil, partly offset by a $334 million decrease in our exports of non-monetary gold, and that our exports of foods, feeds and beverages rose by $1,352 million to $13,710 million on a $595 million increase in our exports of soybeans and a $362 million increase in our exports of corn....in addition, our exports of consumer goods rose by $590 million to $22,859 million on a $836 million increase in our exports of gem diamonds and on a $400 million increase in our exports of jewelry, and despite a $605 million decrease in our exports of pharmaceuticals, and our exports of automotive vehicles, parts, and engines rose by $530 million to $16,013 million on a $334 million increase in our exports of passenger cars....at the same time, our exports of capital goods rose by $87 million to $51,061 million as a $1020 million increase in our exports of civilian aircraft, a $380 million increase in our exports of semiconductors, and a $307 million increase in our exports of industrial machinery not otherwise listed were partly offset by $349 million decrease in our exports of computer accessories and a $320 million decrease in our exports of civilian aircraft engines…moreover, our exports of other goods not categorized by end use rose by $839 million to $8,234 million...
Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our goods imports and shows that higher imports of consumer goods, automotive products, capital goods, and industrial supplies and materials were all major contributors to September's $7.0 billion increase in our imports of goods....our imports of consumer goods rose by $2,039 million to $64,629 million, as a $1,820 million increase in our imports of cell phones was partly offset by a $402 million decrease in our imports of artwork and collectibles, while our imports of automotive vehicles, parts and engines rose by $1,865 million to $40,526 million on a $1,665 million increase in our imports of passenger cars...in addition, our imports of capital goods rose by $1,553 million to $71,458 million on a $429 million increase in our imports of computer accessories, a $336 million increase in our imports of civilian aircraft parts, and a $319 million increase in our imports of industrial machinery not otherwise listed, and our imports of industrial supplies and materials rose by $1,168 million to $56,365 million on a $1,357 million increase in our imports of crude oil, and a $557 million increase in our imports of organic chemicals, which were partly offset by a $471 million decrease in our imports of finished metal shapes, and our imports of other goods not categorized by end use rose by $407 million to $10,939 million....slightly offsetting the increases in those end-use categories, our imports of our imports of foods, feeds, and beverages fell by $86 million to $16,697 million...
The News Release for this month's report also summarizes Exhibit 19 in the full release, which gives us surplus and deficit details on our goods trade with selected countries:
The September figures show surpluses, in billions of dollars, with South and Central America ($4.8), Netherlands ($3.2), Hong Kong ($2.7), Australia ($1.6), Belgium ($1.2), Singapore ($0.7), United Kingdom ($0.5), and Saudi Arabia ($0.2). Deficits were recorded, in billions of dollars, with China ($24.1), European Union ($16.8), Mexico ($12.2), Vietnam ($9.4), Japan ($6.9), Germany ($6.3), Ireland ($6.2), Canada ($5.9), Taiwan ($5.0), South Korea ($4.5), India ($3.9), Italy ($2.9), Switzerland ($2.1), Malaysia ($1.9), France ($0.9), Israel ($0.6), and Brazil ($0.3).
- The deficit with Japan increased $1.9 billion to $6.9 billion in September. Exports increased $0.2 billion to $6.7 billion and imports increased $2.1 billion to $13.6 billion.
- The deficit with Vietnam increased $1.5 billion to $9.4 billion in September. Exports increased $0.1 billion to $0.8 billion and imports increased $1.6 billion to $10.3 billion.
- The balance with Singapore shifted from a deficit of $1.0 billion in August to a surplus of $0.7 billion in September. Exports increased $0.2 billion to $4.0 billion and imports decreased $1.5 billion to $3.2 billion.
In the recent advance report on 3rd quarter GDP, the contribution of September’s trade in goods was estimated based on the sketchy Advance Report on our International Trade in Goods which was released just before the GDP release...that report estimated that our seasonal adjusted September goods trade deficit was at $85,783 million on a Census basis, up from the $84,642 million goods deficit in August, on goods exports valued at $173,984 million and goods imports valued at $259,767 million...this report revises that estimate and shows that our actual goods trade deficit in September was $86,301 billion on a balance of payments basis, and $86,844 million on a Census basis, on Census adjusted goods exports of $173,768 million and Census adjusted goods imports of $260,613 million...in addition, the Census basis August goods trade deficit was revised from $84,642 million to $84,744 million...together, those revisions from the previously published data mean that the 3rd quarter trade deficit in goods was on the order of $1,163 million more than was included in last week's GDP report, or roughly $4.7 billion on an annualized basis, which would mean that the 3rd quarter's GDP should be revised about about 0.08 percentage points lower when the 2nd estimate of GDP is released at the end of November...
For our trade in services, the BEA's Key source data and assumptions (xls) for the advance estimate of third quarter GDP provides aggregate exports and imports of services at annual rates on an international-transactions-accounts basis, indicating that the BEA assumed a $9.5 billion decrease in exports of services and a $17.0 billion increase in imports of services on an annual basis in September when computing 3rd quarter GDP...while there is no comparable annualized metric or adjusted data in this trade report that we could directly compare that to, this release does show that exports of services rose $0.3 billion in September after August's exports of services were revised $0.5 billion lower, and that imports of services rose $1.5 billion in September after August's imports of services were revised $0.3 billion lower...after multiplying those monthly figures by 12 to crudely approximate an annualized change, that suggests that the annual rate for September exports of services used in the GDP report was on the order of $7.1 billion too low, while the annual rate for September imports of services used in the GDP report was about $2.6 billion too high...applying those annualized differences, and also crudely annualizing the services trade revisions for August vis a vis those reported in the GDP report in the same manner, the annual rate for 3rd quarter services exports would be revised about $1.1 billion higher, while the annual rate for 3rd quarter services imports would be revised about $1.0 billion higher...a resulting upward revision of $0.1 billion to our total services surplus in NIPA terms would have a negligible impact on 3rd quarter GDP....however, since our goods deficit was underestimated, it appears that this report will still subtract about 0.8 percentage points from 3rd quarter GDP when the 2nd estimate revisions are released on November 29th...
September Wholesale Sales Up 2.2%, Wholesale Inventories Up 0.2%; Underestimated by GDP Report
The September report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales during the month was $678.1 billion, up 2.2 percent (±0.5 percent) from the revised August level, and 0.9 percent (±0.5 percent) higher than the wholesale sales of September 2022... the August preliminary sales estimate was revised up to $663.7 billion from the $662.3 billion in wholesale sales reported last month, which thus revised the July to August change in sales from up 1.8% (±0.4 percent) to up 2.0%...as an intermediate economic activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold....
On the other hand, the monthly change in private inventories is a major factor in GDP, since additional goods left in a warehouse represent goods that were produced but not sold, and this September report estimated that wholesale inventories were valued at a seasonally adjusted $918.5 billion at month end, up 0.2 percent (±0.2 percent)* from the revised August level but 1.2 percent (±1.1 percent) lower than in September a year ago....August's inventory value was revised from the $900.2 billion reported last month to $900.3 billion, which was still down 0.1% from July...
In the advance report on 3rd quarter GDP of two weeks ago, wholesale inventories were estimated based on the sketchy Advance Report on Wholesale and Retail Inventories, which was released the day before the GDP release...that report estimated that our seasonally adjusted wholesale inventories were valued at $900,573 million at the end of September, down slightly from a revised $900,810 million in August....that's $690 million less than the wholesale inventories values of $901,806 million and $900,267 million for those two months than this report shows, which would imply that the quarterly change in 3rd quarter wholesale inventories was underestimated at roughly a $2.8 billion annual rate....assuming there's no significant imbalance in the inflation adjustments on the component inventories that were revised, that would mean that the growth rate of 3rd quarter GDP was underestimated by around 0.06 percentage points, just based on what this report shows...
(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are picked from the aforementioned GGO posts, contact me…)
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