12.18.2009 Policy Points

October Balance of Trade

In October, the United States imported more goods and services from abroad than it exported, according to the most recent report from the Bureau of Economic Analysis. Compared to the revised September data, the October trade deficit was lower and the levels of of both imports and exports were higher

trade1The graph (left) shows the changes in American imports and exports that have occurred since the start of the recession in December 2007.

The recession has reduced American demand for foreign goods and services and foreign demand for American goods and services (though the fall in the dollar’s value likely is boosting American exports).

Compared to a year ago (seasonally adjusted), U.S. imports were 18.8 percent lower while exports were 8.6 percent lower. In recent months, both imports and exports have been trending upwards.

The rapid decline in imports has helped to reduce the trade gap. Last month, the  U.S. imported $32.9 billion more than it exported trade3. When imports of petroleum products are excluded, the trade gap was $13.3 billion.

Compared to one year ago (seasonally adjusted), the non-petroleum trade deficit is 44 percent lower and the overall trade deficit is 44.5 percent lower.

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