United States: trade deficit hits a 5-year high

CHART OF THE WEEK

For the first time since 2012, November’s US trade deficit has exceeded USD 50 billion. It has risen sharply in the last two months, by almost USD 6 billion. This deterioration is due to strong growth in goods imports, which have risen 3.8% in volume, while exports have only risen 2.1%. The services balance is stable.

OUR ANALYSIS

This pick-up in the pace of imports will drag down 2017 fourth-quarter growth. Based on end-November data, the impact could be up to 1 point in GDP growth, but within a context of particularly robust final demand.

Aside from the last quarter of 2017, export growth has actually been slightly ahead of imports: 7.3% and 5.9% respectively year-on-year. These readings reflect healthy global economic conditions. However, if we were to see the end-of-year scenario continue, could the trade balance deteriorate further, becoming a long-lasting drag on growth? Although not impossible, this is unlikely. It is typical to see international trade boosting growth during the final phase of a cycle. Indeed, it is often at this point that growth in the rest of the world pushes US export levels up.

 

 

The opinion expressed above is dated 11 January 2018 and is liable to change.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS.


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Julien-Pierre Nouen

Directeur des études économiques et de la gestion diversifiée