Today’s trade report was a surprise: to the upside on exports and to the downside on imports. According to preliminary figures, the trade balance widened by $1 billion on a 2% surge in exports and a bigger 2.3% jump in imports. Overall, the momentum is snail-speed: the cliffdiving has likely ended, but strong recovery has not yet emerged.
On the import side, it appears that the only “import” out there is of the costly petroleum kind. To be sure, service-sector imports were up 1.4% (travel, travel fares, royalties and licensing fees, direct defense expenditures, and miscellaneous); but at 20% of total imports, it was the $4 billion surge in petroleum goods that took the cake.
Moving on to the upside surprise: exports grew across the goods and service sectors –a definite positive. June marks the first time since August 2008 (one year ago to date) that the 3-month moving average of exports grew. Exports are stabilizing, but still way down – almost 17% in real terms.