march 2015 us trade balance data (grant toch)
TRANSCRIPT
US Trade Balance Data March 2015
Conclusion
The US trade deficit resumed its downward trend because the deceleration in imports has been more than offset by the deceleration in exports. This overall dynamic, spurred in part by USD appreciation and slowing global growth, will continue to pressure overall US GDP growth, much as we saw in the last quarter.
The closing and then re-opening of the US west coast ports impacted China and Japan mostly. That said, overall 1q15 US imports were almost identical the US imports in each year starting in 2011 implying little demand growth. We see the same trend in US imports excluding petroleum.
Finally, US exports to China are no longer growing and the current rate of change in consistent with the pace seen last heading into the 2008 recession. Exports to Canada and Mexico, the two other significant destinations for US exports (in addition to China) are slowing.
Analysis
The overall US trade deficit, from a level perspective, has resumed its downward trend, even when including petroleum products, something we believe reflects overall global currency, monetary and fiscal policy imbalance:
(1,000,000)
(900,000)
(800,000)
(700,000)
(600,000)
(500,000)
(400,000)
(300,000)
(200,000)
(100,000)
0
12/1
/199
39/
1/19
946/
1/19
953/
1/19
9612
/1/1
996
9/1/
1997
6/1/
1998
3/1/
1999
12/1
/199
99/
1/20
006/
1/20
013/
1/20
0212
/1/2
002
9/1/
2003
6/1/
2004
3/1/
2005
12/1
/200
59/
1/20
066/
1/20
073/
1/20
0812
/1/2
008
9/1/
2009
6/1/
2010
3/1/
2011
12/1
/201
19/
1/20
126/
1/20
133/
1/20
1412
/1/2
014
US Trade Balance, TTM
US Trade Balance, TTM
Shown in a different way, imports are growing faster than exports but both are decelerating and growing at very low levels suggesting slow US and global growth:
-35.0%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0%12
/1/1
994
9/1/
1995
6/1/
1996
3/1/
1997
12/1
/199
7
9/1/
1998
6/1/
1999
3/1/
2000
12/1
/200
0
9/1/
2001
6/1/
2002
3/1/
2003
12/1
/200
3
9/1/
2004
6/1/
2005
3/1/
2006
12/1
/200
6
9/1/
2007
6/1/
2008
3/1/
2009
12/1
/200
9
9/1/
2010
6/1/
2011
3/1/
2012
12/1
/201
2
9/1/
2013
6/1/
2014
3/1/
2015
US Imports and Exports, TTM, Y/Y
US Exports, TTM, Y/Y US Imports, TTM, Y/Y
We would like to spend a moment focusing solely on US import data as a proxy for US internal demand, particularly in light of the re-opening of the US west coast ports. Above, you saw the very slow trailing twelve month growth trend in US imports.
Generally speaking, US imports, excluding petroleum, continue to soften despite the re-opening of the West Coast ports and, quite frankly, have not grown since 2011:
90
95
100
105
110
115
120
125
12/1
/200
1
6/1/
2002
12/1
/200
2
6/1/
2003
12/1
/200
3
6/1/
2004
12/1
/200
4
6/1/
2005
12/1
/200
5
6/1/
2006
12/1
/200
6
6/1/
2007
12/1
/200
7
6/1/
2008
12/1
/200
8
6/1/
2009
12/1
/200
9
6/1/
2010
12/1
/201
0
6/1/
2011
12/1
/201
1
6/1/
2012
12/1
/201
2
6/1/
2013
12/1
/201
3
6/1/
2014
12/1
/201
4
US Imports, Excluding Fuel (January 2000 = 100)
US Imports, Excludng Fuel (January 2000 = 1000)
The two largest impacts from the west coast port re-opening were in China and Japan.
US imports from China in March 2015 increased significantly:
05000
100001500020000250003000035000400004500050000
1/1/
1993
12/1
/199
3
11/1
/199
4
10/1
/199
5
9/1/
1996
8/1/
1997
7/1/
1998
6/1/
1999
5/1/
2000
4/1/
2001
3/1/
2002
2/1/
2003
1/1/
2004
12/1
/200
4
11/1
/200
5
10/1
/200
6
9/1/
2007
8/1/
2008
7/1/
2009
6/1/
2010
5/1/
2011
4/1/
2012
3/1/
2013
2/1/
2014
1/1/
2015US Imports from China, Level Data
US Imports from China, Level Data
From a year-over-year basis, you can see this with the blue line below:
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1/1/
1993
12/1
/199
3
11/1
/199
4
10/1
/199
5
9/1/
1996
8/1/
1997
7/1/
1998
6/1/
1999
5/1/
2000
4/1/
2001
3/1/
2002
2/1/
2003
1/1/
2004
12/1
/200
4
11/1
/200
5
10/1
/200
6
9/1/
2007
8/1/
2008
7/1/
2009
6/1/
2010
5/1/
2011
4/1/
2012
3/1/
2013
US Exports to and Imports from China, TTM, Y/Y (1994- Present)
US Imports From China, TTM, Y/Y US Exports to China, TTM, Y/Y
Japan also showed positive impact from the re-opening, first from a level data:
6000
7000
8000
9000
10000
11000
12000
13000
14000
150001/
1/19
93
12/1
/199
3
11/1
/199
4
10/1
/199
5
9/1/
1996
8/1/
1997
7/1/
1998
6/1/
1999
5/1/
2000
4/1/
2001
3/1/
2002
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2003
1/1/
2004
12/1
/200
4
11/1
/200
5
10/1
/200
6
9/1/
2007
8/1/
2008
7/1/
2009
6/1/
2010
5/1/
2011
4/1/
2012
3/1/
2013
2/1/
2014
1/1/
2015
US Imports from Japan, Level Data
US Imports from Japan, Level Data
Nonetheless, despite the re-opening and massive Yen devaluation, US imports from Japan are DECLINING on a trailing twelve month year-over-year basis:
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1
/199
4
10/1
/199
5
8/1/
1996
6/1/
1997
4/1/
1998
2/1/
1999
12/1
/199
9
10/1
/200
0
8/1/
2001
6/1/
2002
4/1/
2003
2/1/
2004
12/1
/200
4
10/1
/200
5
8/1/
2006
6/1/
2007
4/1/
2008
2/1/
2009
12/1
/200
9
10/1
/201
0
8/1/
2011
6/1/
2012
4/1/
2013
2/1/
2014
12/1
/201
4
US Imports from Japan, TTM, Y/Y
US Imports from Japan, TTM, Y/Y
If we focus on US imports overall, including those from China and Japan, we can see that 1q15 was similar from a level perspective to all 1q US import data starting from 2011. More importantly, from a level perspective, US 1q imports have not grown since 2011:
100,000
200,000
300,000
400,000
500,000
600,000
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US Imports, 1q Level Data (1993-Present)
US Imports, 1q Level Data (1993-Present)
We can also see this from a year-over-year perspective:
-40%
-30%
-20%
-10%
0%
10%
20%
30%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US Imports, 1q Data, Y/Y (1993-Present)
US Imports, 1q Data, Y/Y (1993-Present)
Perhaps to isolate even more the US demand picture, we focus on US imports from Germany, the only European Union country that is in the top 10 of US import sources (Germany is the 5th largest source of imports), one of the largest beneficiaries of the ECB’s recent efforts to devalue the Euro and completely unaffected by the US west coast port closure and re-opening.
As you can see, on a trailing 12 month basis, US imports from Germany continue to decelerate:
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1
/199
4
10/1
/199
5
8/1/
1996
6/1/
1997
4/1/
1998
2/1/
1999
12/1
/199
9
10/1
/200
0
8/1/
2001
6/1/
2002
4/1/
2003
2/1/
2004
12/1
/200
4
10/1
/200
5
8/1/
2006
6/1/
2007
4/1/
2008
2/1/
2009
12/1
/200
9
10/1
/201
0
8/1/
2011
6/1/
2012
4/1/
2013
2/1/
2014
12/1
/201
4
US Imports from Germany, TTM, Y/Y
US Imports from Germany, TTM, Y/Y
This can also be seen looking at all 1q data from y/y perspective:
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%19
94
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
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2010
2011
2012
2013
2014
2015
US Imports from Germany, 1q Y/Y (1993-Present)
US Imports from Germany, 1q Y/Y (1993-Present)
We can also see sluggish US demand by looking at imports from both Canada and Mexico, the second and third largest source of US imports, both of whom were completely unaffected by the US west coast port closing and re-opening:
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%12
/1/1
994
11/1
/199
5
10/1
/199
6
9/1/
1997
8/1/
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7/1/
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/200
7
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2009
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2010
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2011
5/1/
2012
4/1/
2013
3/1/
2014
2/1/
2015
US Imports from Canada, TTM, Y/Y
US Imports from Canada, TTM, Y/Y
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
12/1
/199
4
10/1
/199
5
8/1/
1996
6/1/
1997
4/1/
1998
2/1/
1999
12/1
/199
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/200
0
8/1/
2001
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2002
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2003
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2004
12/1
/200
4
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/200
5
8/1/
2006
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2007
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2008
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2009
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9
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/201
0
8/1/
2011
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2012
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2013
2/1/
2014
12/1
/201
4
US Imports from Mexico, TTM Y/Y
US Imports from Mexico, TTM, Y/Y
US exports are also slowing, as to be expected from the USD appreciation (blue line):
-35.0%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0%12
/1/1
994
9/1/
1995
6/1/
1996
3/1/
1997
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/199
7
9/1/
1998
6/1/
1999
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/200
0
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2001
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2002
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2003
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/200
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2005
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/200
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2007
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2008
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/200
9
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2010
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2011
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2012
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/201
2
9/1/
2013
6/1/
2014
3/1/
2015
US Imports and Exports, TTM, Y/Y
US Exports, TTM, Y/Y US Imports, TTM, Y/Y
The largest 3 destinations for US goods and services are, in order: (i) Canada; (ii) Mexico; and (iii) China.
Looking at the chart below, we see that US exports to China (red line) are now declining for the first time since 2006-2007, something that has not been impacted by currency related issues as the RMB is pegged to the USD:
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1/1/
1993
12/1
/199
3
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/199
4
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/199
5
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1996
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1997
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US Exports to and Imports from China, TTM, Y/Y (1994- Present)
US Imports From China, TTM, Y/Y US Exports to China, TTM, Y/Y
As a result of growing US imports from China and slowing US exports to China, the US trade deficit with China hit another record level:
(400,000)
(350,000)
(300,000)
(250,000)
(200,000)
(150,000)
(100,000)
(50,000)
0
US Trade Balance with China, TTM
US Trade Balance with China, TTM
US exports to Canada are also slowing:
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
12/1
/199
4
11/1
/199
5
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/199
6
9/1/
1997
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1998
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5
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/200
6
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/200
7
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2008
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2009
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2010
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2011
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2012
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2013
3/1/
2014
2/1/
2015
US Exports to Canada, TTM, Y/Y
US Exports to Canada, TTM, Y/Y
And exports to Mexico are slowing as well:
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%12
/1/1
994
11/1
/199
5
10/1
/199
6
9/1/
1997
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1998
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/200
5
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/200
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/200
7
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2009
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2010
6/1/
2011
5/1/
2012
4/1/
2013
3/1/
2014
2/1/
2015
US Exports to Mexico, TTM, Y/Y
US Exports to Mexico, TTM, Y/Y