Exports down 1.3% in June, trade imbalance up 18.8%

posted at 9:30 am on August 11, 2010 by Ed Morrissey

Yesterday, a JP Morgan analyst estimated that the late numbers from June indicated a second-quarter GDP growth rate of 1.3% rather than the 2.4% initial estimate from Commerce, but hedged by saying that the trade numbers could shift the number yet again.  Commerce released its trade numbers this morning, and JP Morgan may need to stock up on red pens.  US exports declined in June while imports rose, and the trade imbalance in goods and services increased 18.8% to $49.9 billion:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total June exports of $150.5 billion and imports of $200.3 billion resulted in a goods and services deficit of $49.9 billion, up from $42.0 billion in May, revised. …

The May to June decrease in exports of goods reflected decreases in capital goods ($1.4 billion); industrial supplies and materials ($1.0 billion); and foods, feeds, and beverages ($0.3 billion). Increases occurred in automotive vehicles,parts, and engines ($0.2 billion); other goods ($0.2 billion); and consumer goods ($0.1 billion).

The May to June increase in imports of goods reflected increases in consumer goods ($3.1 billion); automotive vehicles, parts, and engines ($1.3 billion); other goods ($0.6 billion); and capital goods ($0.5 billion). A decrease occurred in industrial supplies and materials ($0.2 billion). Foods,
feeds, and beverages were virtually unchanged.

Even the good news on the increases were tempered.  For instance, while our exports of automotive products slightly increased, it was countered by a much higher increase in imports in the same category.  Furthermore, the services surplus declined slightly in June, a hint that America may not keep its edge on skilled services in an already-tight economy.  However, some of that was due to payments for rights to World Cup advertising, a one-time hit that fed a $600 million increase in service imports.

The trade balance picture shows the US steadily falling behind over the last year, and exports falling back in the summer:

The AP manages to avoid its favorite adverb in reporting the results:

The U.S. trade deficit surged in June to the highest level in 20 months and imports of foreign consumer goods hit an all-time high. But U.S. exports faltered, representing a setback for the global hopes of American manufacturers.

American manufacturers already knew this.  After all, they see their own sales sheets before Commerce does, and their “global hopes” are focused narrowly on their own efforts, as they should be.  The more accurate way of stating this is that it represents a setback to the “global hopes” of the Obama administration, which has tried selling the Recovery Summer myth for the last two months.

If JP Morgan’s Michael Feroli says that the actual Q2 GDP number was 1.3% before this announcement, where does that put it after these numbers?

Update: Zero Hedge answers the question by predicting a revision to … 0.9%. The revised number will be announced on August 27th. That number will get serious media attention, if indeed that’s what we see.

Update II: Reuters declares itself “surpris[ed],” although for good reason this time:

The U.S. trade deficit widened a surprising 18.8 percent in June on a surge of consumer goods from China and other suppliers, while U.S. exports fell, a government report showed on Wednesday.

The monthly trade gap totaled $49.9 billion, the highest since October 2008. The deficit was wider than any of the 67 Wall Street forecasts collected before the report.

True, but the gap has been widening over the last few months.

Update III: Had “exports rose” in first paragraph; should have been “imports rose.” Thanks to those who sent me the heads-up.


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Oh well, now pardon me while I shoot some hoops with some NBA stars and then jet off to Spain.

Suckers.

NoDonkey on August 11, 2010 at 9:33 AM

MOVE ALONG!

NOTHING TO SEE HERE!

catmman on August 11, 2010 at 9:34 AM

You guys see the latest Rasmussen numbers??
UGLY.

B Man on August 11, 2010 at 9:35 AM

You guys see the latest Rasmussen numbers??
UGLY.

B Man on August 11, 2010 at 9:35 AM

reality.

ted c on August 11, 2010 at 9:37 AM

Recovery Summer myth

Who is the flamin’ jackass who came up with that “Recovery Summer” term anyway?

Del Dolemonte on August 11, 2010 at 9:37 AM

I make no decisions until I get Paul Krugman’s take on this. I must know what the brightest economic minds have to say.

Extrafishy on August 11, 2010 at 9:37 AM

Oh well, now pardon me while I shoot some hoops with some NBA stars and then jet off to Spain.

……

BBBBut he did it for the TROOPS!

artist on August 11, 2010 at 9:39 AM

Obama’s America.

Inanemergencydial on August 11, 2010 at 9:40 AM

MOVE ALONG!

NOTHING TO SEE HERE!

catmman on August 11, 2010 at 9:34 AM

Dang! Beat me.

listens2glenn on August 11, 2010 at 9:40 AM

DJIA down 200 pts in the first 5 mins of trading.

Heck of a job, Dems.

Cody1991 on August 11, 2010 at 9:41 AM

Who is the flamin’ jackass who came up with that “Recovery Summer” term anyway?

Del Dolemonte on August 11, 2010 at 9:37 AM

hey, nobody messes with sheriff Joe Biden….

ted c on August 11, 2010 at 9:43 AM

However, some of that was due to payments for rights to World Cup advertising, a one-time hit that fed a $600 million increase in service imports.

$600 million because 3 or 4 Europeans were kicking each other in the shins while 20 other Europeans were standing around watching the 4 Europeans kick each other in the shins?

I guess it would have been worse is they actually had occasional stoppages in play for advertising and substitutions like modern sports.

forest on August 11, 2010 at 9:44 AM

Uniform November Echo X-ray Papa Echo Charlie Tango Echo Delta Lima Yankee

fusionaddict on August 11, 2010 at 9:44 AM

The original estimate had a 45% deviance from actual.

In my experience, that would get you fired in a real job.

But this is government work.

Back to beer pong!

jeff_from_mpls on August 11, 2010 at 9:45 AM

These numbers just confirm what we savvy market watchers already knew – invest in various lubricant manufacturers and flexibility coaches. You heard it here first.

volnation on August 11, 2010 at 9:46 AM

Back to beer pong!

jeff_from_mpls on August 11, 2010 at 9:45 AM

Thanks for the morning laugh before I head off to work. :-)

Keemo on August 11, 2010 at 9:47 AM

Was this EXPECTED?

stenwin77 on August 11, 2010 at 9:47 AM

fusionaddict on August 11, 2010 at 9:44 AM

and roger.

ted c on August 11, 2010 at 9:48 AM

Per ZeroHedge, Q2GDP is now below 1%.

I thought Teh Won was vowing to double our exports in 5 years. He’s kind of off to a slow start.

I’d recommend exporting liberal progressives, but we’d have to pay someone to take them. Still, ………….

GnuBreed on August 11, 2010 at 9:49 AM

US exports declined in June while exports rose,

Hey, ED!?

OldEnglish on August 11, 2010 at 9:50 AM

I’d recommend exporting liberal progressives, but we’d have to pay someone to take them. Still, ………….

GnuBreed on August 11, 2010 at 9:49 AM

you’d think that with all the “love Cuba” talk and viva Fidel and Che crap stuff they love to emote that they’d self deport off the coast of Florida in a tire raft or something. Alas, the big free t!tty that they suckle from is just too much to leave, they must love Cuba from afar. I’m sure Fidel is shedding a tear….

ted c on August 11, 2010 at 9:52 AM

Is tax on imports coming?

Oil Can on August 11, 2010 at 9:52 AM

fusionaddict on August 11, 2010 at 9:44 AM

FUBAR

Cindy Munford on August 11, 2010 at 9:52 AM

i think drudge has crashed.

ted c on August 11, 2010 at 9:53 AM

Dow is down…..-200

Rovin on August 11, 2010 at 9:55 AM

FUBAR

Cindy Munford on August 11, 2010 at 9:52 AM

FUBAR indeed, Cindy…FUBAR indeed.

fusionaddict on August 11, 2010 at 9:56 AM

Isn’t Chicago Jesus supposed to give a speech today about saving manufacturing jobs..You have to laugh to keep from crying..

Dire Straits on August 11, 2010 at 10:00 AM

Isn’t Chicago Jesus supposed to give a speech today about saving manufacturing jobs..You have to laugh to keep from crying..

Dire Straits on August 11, 2010 at 10:00 AM

Where’s the speech taking place, and is everyone that works there getting an unpaid, unwanted day off as a result?

fusionaddict on August 11, 2010 at 10:01 AM

Bloomberg’s headline….
U.S. Trade Deficit Unexpectedly Widens to $49.9 Billion in June

Seriously…. how does the LSM continue to use Unexpectedly?

bloviator on August 11, 2010 at 10:05 AM

fusionaddict on August 11, 2010 at 10:01 AM

In the afternoon (08/11/10), the president will have lunch with the vice president in the Private Dining Room. Later, he will deliver remarks and sign the Manufacturing Enhancement Act of 2010, a bill that will help create jobs and invest in the manufacturing sector…

I assume it will be at The White House.

Dire Straits on August 11, 2010 at 10:06 AM

ted c on August 11, 2010 at 9:53 AM

Nope- just reality hit his pages yet again as he told the world that Dems cut Food Stamps to pay for teachers.

journeyintothewhirlwind on August 11, 2010 at 10:11 AM

I assume it will be at The White House.

Dire Straits on August 11, 2010 at 10:06 AM

So luckily it’s at a place where no one actually gets any work done anyway. Rad.

fusionaddict on August 11, 2010 at 10:11 AM

To answer Ed’s last question above…from ZeroHedge (best econoblog out there):

And courtesy of the Current Account equation, what this surge in deficits means is that Q1 GDP will now likely be revised to well under 1.0%! As JPM reported earlier, revision in BEA assumptions on wholesale and non-durable inventory alone will push Q1 GDP from the official 2.4% to 1.3%. Today’s data is the last nail in the Q2 GDP number, and according to analysts will take out another 0.4% from the GDP, meaning that when all is said and done, Q2 GDP will come out to sub-1%. And this was in a quarter when the stimulus was still expected to be boosting GDP. We now fully expect that the final reports of Q3 and Q4 GDP, some time in 2011, to be solidly negative, as the economy is now officially contracting once again. In other words, the Double Dip-ression is (even more) official.

This economy is just horrible!!!

LordMaximus on August 11, 2010 at 10:12 AM

The US is bankrupt and nobody knows it

faraway on August 11, 2010 at 10:13 AM

Ah the SUMMER of RECOVERY!

The Pinnochio Presidente and his spouse do their best “Cousin Eddie” impersonation Partying and Vacationing world wide while real Americans relax at home with their feet up patiently waiting for their unemployment checks and the November polls to open.
Is it safe to say the American Affirmative Action Experiment has failed?

dhunter on August 11, 2010 at 10:14 AM

I don’t think you guys here are sensitive or educated enough to Michelle Obama’s plight and her need to spend hundreds of thousands of taxpayer dollars per day jetsetting and shopping around Spain with her entourage. She NEEDED to rent out 60 rooms in a five-star palatial resort, you see, so that you people could receive the benefit of her pleasant and relaxed disposition as comfort during these difficult economic times.

Probably because you’re all just racists.

ARE YOU NOT STIMULATED?

PS – just for laughs, I clicked through the Joy Behar show a few days ago, and her intellectually diverse panel of three flaming liberals spent the entire segment trying to explain away and softpeddle this story – lamenting the whole time about how people are making a big deal out of it while conceding that it didn’t “look good.”

Of course, Sarah Palin rolls her eyes and it’s a national scandal.

Good Lt on August 11, 2010 at 10:14 AM

Like Rush said, the patient is dying.

B Man on August 11, 2010 at 10:14 AM

So luckily it’s at a place where no one actually gets any work done anyway. Rad.

fusionaddict on August 11, 2010 at 10:11 AM

+1..He has ran out of “Green Jobs” places..

Dire Straits on August 11, 2010 at 10:15 AM

Of course, Sarah Palin rolls her eyes and it’s a national scandal.

Good Lt on August 11, 2010 at 10:14 AM

Let me just say, though off-topic, in this post-Christie world I too would roll my eyes every time someone claims absolute moral authority by saying they’re a TEEEEACHEEEER.

fusionaddict on August 11, 2010 at 10:17 AM

Good Lt on August 11, 2010 at 10:14 AM

Yes, but that trip helped her children.
And if she’s going to be campaigning this election season it would be helpful for her to look you know, less angry.

Helps bonding with the little people, you know.

B Man on August 11, 2010 at 10:17 AM

Weren’t they recently bragging about the export numbers?

mankai on August 11, 2010 at 10:18 AM

“Exports down 1.3% in June, trade imbalance up 18.8%”

I surmise, all to the ‘Community Organizer’s” master plan! Things are moving along just swimmingly for the Chicago gang.

GFW on August 11, 2010 at 10:20 AM

Don’t worry. Cap and Trade and a green economy will cure all our ills.

And unicorn crap tastes like candy, heals disease and will make ObamaCare profitable.

Canadian Infidel on August 11, 2010 at 10:22 AM

Biden: US GDP growth to continue at “3 percent plus”

3 percent plus negative 4 percent = -1%

Sounds about right.

PD Quig on August 11, 2010 at 10:31 AM

But the good news is my golf handicap is going down too.

oldernwiser on August 11, 2010 at 10:31 AM

Yes, but that trip helped her children.
And if she’s going to be campaigning this election season it would be helpful for her to look you know, less angry.

Helps bonding with the little people, you know.

My theory is that Big Daddy can’t get it up anymore. Mama needed some mucho macho, so she left daddy with a kitchen pass. We’ll see just how long these two last after they’re out on their @sses in Jan 2013.

PD Quig on August 11, 2010 at 10:35 AM

From zerohedge:

10 Year Under 2.7% As Legacy Curve Steepeners Cause Much Pain; Yields Imply 75 Points Of S&P Downside
Submitted by Tyler Durden on 08/11/2010 09:20 -0500

The pain for the biggest groupthink trade over the past year, the curve steepener, is getting unbearable. The 10 Year is now pushing below 2.70%, last hitting 2.69%, the lowest in over 16 years, as the 2s10s is at 219 bps, or the tightest since April 2009. At the same time, deflationary CMS trade are printing money. Look for many more steepener unwinds, especially if the 10 Year continues on its steady path to 2.5%. At this rate the record level may be hit in as little as 24 hours. And unlike before, equities tamely follow through the deflationary path suggested by credit. And now that equities have finally regained some semblance of rationality, they have a long way to drop: according to the mid-term chart between 10 Year and stocks, the fair value of stocks is around 1,025, or 75 points lower. We expect this level will be recaptured shortly.

Cody1991 on August 11, 2010 at 10:37 AM

You know, these numbers bode well politically for our side but it is really time to worry about the economy. The media must start talking about this and not just the conservative media.
Politicians live in a world that shelters them from reality and it is just going to get worse. We can’t wait until November to b*tch slap them out of their coma.

Vince on August 11, 2010 at 10:40 AM

WooHoo! Green Shoots!

AUINSC on August 11, 2010 at 10:41 AM

Ed, looks like a typo in the text: “US exports declined in June while exports rose, and the trade imbalance in goods and services increased 18.8% to $49.9 billion” shouldn’t this be “US exports declined in June while imports rose, and the trade imbalance in goods and services increased 18.8% to $49.9 billion”

Fogpig on August 11, 2010 at 10:41 AM

US exports declined in June while exports rose,

Shouldn’t this be imports?

BadDogMN on August 11, 2010 at 10:43 AM

From Drudge:

[Note: Media coverage of Obama has improved significantly over past week as his approval ratings have slipped... While 43% of voters approve, 55% of media coverage has been positive.]

Well, I guess this answers my plaintive cry for serious press coverage.

Vince on August 11, 2010 at 10:53 AM

I thought Teh Won was vowing to double our exports in 5 years. He’s kind of off to a slow start.

I’d recommend exporting liberal progressives, but we’d have to pay someone to take them. Still, ………….

GnuBreed on August 11, 2010 at 9:49 AM

Whatever the cost, it would be worth it.

VelvetElvis on August 11, 2010 at 10:55 AM

Who is the flamin’ jackass who came up with that “Recovery Summer” term anyway?

Del Dolemonte on August 11, 2010 at 9:37 AM

How about ‘Recovery Bummer’?

EnglishMike on August 11, 2010 at 11:00 AM

B+ Still?

dhunter on August 11, 2010 at 11:41 AM

We’re getting clobbered by the Germans. Export of Germany surged ahead by almost 4% in June. It’s some 30% higher than a year ago. At the current dollar-euro exchange rate, our companies just aren’t competitive in the international market.

year_of_the_dingo on August 11, 2010 at 12:08 PM

The German trade surplus is up 44% from May to June.

year_of_the_dingo on August 11, 2010 at 12:10 PM

Update: Zero Hedge answers the question by predicting a revision to … 0.9%.

Isn’t Chicago Jesus supposed to give a speech today about saving manufacturing jobs..You have to laugh to keep from crying..

Dire Straits on August 11, 2010 at 10:00 AM

Exactly…..

…………just imagine how angry we would be if the government was actually telling us the truth about this economic mess.

Baxter Greene on August 11, 2010 at 12:25 PM

We’re getting clobbered by the Germans. Export of Germany surged ahead by almost 4% in June. It’s some 30% higher than a year ago. At the current dollar-euro exchange rate, our companies just aren’t competitive in the international market.

year_of_the_dingo on August 11, 2010 at 12:08 PM

…which is one of the reasons Obama got his butt handed to him at the latest G20……his liberal policies spell economic disaster.

Baxter Greene on August 11, 2010 at 12:28 PM

Just wait ’til the world gets a look at that Government Motors new, fine looking piece of machinery, the Chevy Volt! That will get those export numbers humming!

/s

Desert Gardens on August 11, 2010 at 12:46 PM

Trade deficits are NOT like budget deficits, we basically will run a trade deficit as long as foreigners are buying more of our debt than Americans are.

http://www.cato.org/pub_display.php?pub_id=3655

crosspatch on August 11, 2010 at 12:53 PM

And here is a more recent article:

http://www.cato-at-liberty.org/2010/01/12/good-news-in-the-rising-trade-deficit/

People don’t understand trade deficits. The initial emotional response is to consider that they are bad.

We should be more concerned if the trade deficit DROPS.

The media’s tendency to describe a rising trade deficit as bad news or imports as a drag on economic growth has reinforced misconceptions that politicians perpetuate all the time: that exports are good; imports are bad; the trade account is the “scoreboard,” and; the large U.S. trade deficit is proof that the United States is losing at trade.

But the fact is that imports are very much pro-cyclical. They increase as the economy grows and decrease when it contracts. One of the more obvious reasons for this is that as personal consumption increases (decreases), consumer demand for imports increases (decreases). But another critical, but less discussed, reason is that U.S. producers rely heavily on imported raw materials, components, and capital equipment. As businesses starts to ramp up output, demand for imported intermediate goods rises. Purchases of intermediate goods have accounted for over half of all U.S. import value in recent years, which would suggest that the rising trade deficit has more to do with business being poised for expansion than with consumers itching to go to the mall.

crosspatch on August 11, 2010 at 12:55 PM

fusionaddict on August 11, 2010 at 9:44 AM

I see what you did there.

crosspatch on August 11, 2010 at 12:53 PM

I may be talking out the wrong end (again) but isn’t increased selling of debt bad, because there’s more debt ?

Duncan Khuver on August 11, 2010 at 1:30 PM

ted c on August 11, 2010 at 9:43 AM

This was an inside joke and dirty trick that nobody picked up on. RECOVERY SUMMER????

You lead sheltered lives. Y’all never heard of recovery, I see.

They meant like with a tow truck!! Asstt recovery and NOT the accounting term!

http://www.repoman.com/

BTW, Bill O. went right after former President Richard Nixon when the subject of drity tricks came up. Liberal mind control and narrative strikes again. Somebody ask him to look up Dick Tuck. HE arguably caused Watergate.

http://school-for-champions.com/history/dicktuck.htm

I will not add stories about illegal bugs, voter fraud and other hijunks by LBJ on Senator Goldwater. Long posts are a pain and I’m not really old enough to remember it anyway.

IlikedAUH2O on August 11, 2010 at 1:40 PM

All we have to do is find out how much the Feds are spending in the DC area and bordering counties and spend that much per capita all across the country.

And make Honda Priuses free so we cut down on oil consumption.

IlikedAUH2O on August 11, 2010 at 1:58 PM

HotAir had a poll predicting what the Q2 GDP growth number would be before the 2.4% number came out. I suggest that the results be published again. Those of us who predicted 1% or less look pretty good at this point.

burt on August 11, 2010 at 2:31 PM

likedAUH2O

I still do.

burt on August 11, 2010 at 2:34 PM

Smoot-Hawley, Part Dieu

Coming soon to a theater near you!

karl9000 on August 11, 2010 at 3:33 PM

By the time we have a chance to put adults back in charge of our country, its going to be far too late.

I sure hope the idiots managing our (my) pension fund know how to short-sell. Doubtful.

What with our pension funds going down the toilet and Social Security tanking, it looks to me like anyone who hasn’t retired yet, won’t be – EVER! (Except, of course, for our “elites” in federal government)

Fatal on August 11, 2010 at 5:40 PM