Exports drop in October by biggest margin in almost four years

posted at 10:41 am on December 11, 2012 by Ed Morrissey

“The private sector is doing fine,” Barack Obama assured us in June, but we haven’t seen much evidence for that argument.  Today’s report from Commerce on the trade deficit certainly doesn’t provide any reassurance for that claim.  In fact, exports dropped in October by the biggest margin since Obama took office, and the trade gap with China widened to a new record:

The U.S. trade deficit widened in October as exports suffered the biggest drop in nearly four years, indicating slowing global demand is likely to weigh on U.S. economic growth in the fourth quarter.

The Commerce Department said on Tuesday the trade gap increased 4.9 percent to $42.2 billion even as imports declined to the lowest level in 1-1/2 years. September’s trade gap was revised to $40.3 billion from the previously reported $41.6 billion.

Economists polled by Reuters had expected the trade deficit to rise to $42.6 billion in October. The wider trade gap in October reflected a 3.6 percent fall in exports of goods and services to $180.5 billion. That was the biggest percent drop in exports since January 2009.

Exports have been one of the pillars supporting the economy since the 2007-09 recession ended. The pull back was telegraphed by weak manufacturing surveys and reflects slowing global demand, especially in China and debt-ridden Europe.

The Associated Press reports on the China trade gap, but also suggests that Hurricane Sandy might be to blame for at least a portion of the decline in exports:

Exports dropped 3.6 percent to $180.5 billion. Sales of commercial aircraft, autos and farm products all declined.

Imports fell 2.1 percent to $222.8 billion, reflecting fewer shipments of cell phones, autos and machinery.

The trade gap with China also increased to a record high, which will keep pressure on the Obama administration. Manufacturers and U.S. lawmakers have complained about China’s use of unfair trade practices.

Paul Dales, senior U.S. economist at Capital Economics, said the decline in both exports and imports likely reflected some disruptions from Superstorm Sandy. The storm closed ports in the Northeast for the last few days of October. Exports should rebound in November, although Dales expects the longer-run trend to stay negative.

“The bigger issue is that the weak global economy has been taking its toll on exports,” Dales said, predicting that trade would drag slightly on overall U.S. growth in 2013.

While the storm may have impacted these numbers, the CNBC analysis shows that the decline was not unexpected.  And if the storm disruptions had an outsize impact on October’s numbers, it will likely be worse in November, which is when most of the storm’s impact took place.  Don’t forget, too, that the West Coast ports got partially shut down last month in a labor dispute, which means that we’re likely to see even more decline in November.

So far, the fourth quarter is off to a poor start.

Update: The poor start applies to wholesale figures, too:

Sales. The U.S. Census Bureau announced today that October 2012 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $408.5 billion, down 1.2 percent (+/-0.7) from the revised September level, but were up 2.3 percent (+/-1.1%) from the October 2011 level. The September preliminary estimate was revised downward $0.5 billion or 0.1 percent. October sales of durable goods were down 0.9 percent (+/-1.1%)* from last month, but were up 1.5 percent (+/-1.4%) from a year ago. Sales of motor vehicle and motor vehicle parts and supplies were down 3.1 percent from last month. Sales of nondurable goods were down 1.4 percent (+/-1.2%) from September, but were up 3.0 percent (+/-1.4%) from last October. Sales of petroleum and petroleum products were down 5.7 percent from last month.

Inventories. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $497.1 billion at the end of October, up 0.6 percent (+/-0.4%) from the revised September level and were up 6.6 percent (+/-1.1%) from the October 2011 level. The September preliminary estimate was revised upward $0.2 billion. October inventories of durable goods were up 1.0 percent (+/-0.4%) from last month and were up 8.4 percent (+/-1.1%) from a year ago. Inventories of computer and computer peripheral equipment and software were up 3.0 percent from last month and inventories of lumber and other construction materials were up 1.8 percent. Inventories of nondurable goods were down 0.1 percent (+/-0.9%)* from September, but were up 4.0 percent (+/-2.1%) from last October. Inventories of petroleum and petroleum products were down 3.1 percent from last month.

Inventories/Sales Ratio. The October inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.22.  The October 2011 ratio was 1.17.


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“We are winning”

faraway on December 11, 2012 at 10:41 AM

Forward!

Good Lt on December 11, 2012 at 10:42 AM

Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on December 11, 2012 at 10:44 AM

economy going into the toilet? eh, who cares our president is dreamy and he “cares about people like me”(according to exit polls)

gsherin on December 11, 2012 at 10:44 AM

Black Friday sales were through the roof though, so this really means nothing.

Gatsu on December 11, 2012 at 10:44 AM

Hurricane Sandy is going to give Bush some really stiff competition for Number One on the Obama Blame List.

Curtiss on December 11, 2012 at 10:45 AM

That’s impossible.

That “genius” Paul Krugman said Hurricane Sandy would create an economic boon.

Of course, this is the same Krugman that halped Enron steal billions of dollars.

sentinelrules on December 11, 2012 at 10:45 AM

“The private sector is doing fine,” Barack Obama assured us in June, but we haven’t seen much evidence for that argument.

This is why I think Bob Woodward is correct. The rat-eared wonder may win some skirmishes with Congress but Presidents own recessions. Obama isn’t in as strong a long-term position as he thinks he is as he begins to loot America to reward all the filthy vermin that voted him into a second term (maybe- I still think the corruption was Chicago-level and still not fully dismissed as sour grapes).

Happy Nomad on December 11, 2012 at 10:45 AM

Hurricane Sandy is going to give Bush some really stiff competition for Number One on the Obama Blame List.

Curtiss on December 11, 2012 at 10:45 AM

So ATMs and self-checkout scanners are off the hook?

Happy Nomad on December 11, 2012 at 10:46 AM

Black Friday sales were through the roof though, so this really means nothing.

Gatsu on December 11, 2012 at 10:44 AM

Followed by lackluster sales. You can’t sum up the seasonal sales by one day.

Happy Nomad on December 11, 2012 at 10:47 AM

“The bigger issue is that the weak global economy has been taking its toll on exports,” Dales said, predicting that trade would drag slightly on overall U.S. growth in 2013.

The solution? Global stimulus spending.

On the other hand, since consumers outside the US are no longer participating in commerce, isn’t that a clear Commerce Clause action?

BobMbx on December 11, 2012 at 10:48 AM

Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on December 11, 2012 at 10:44 AM

Don’t hold your breath waiting. When was the last time liberals owned to any single mistake, besides “bad messaging”?

Archivarix on December 11, 2012 at 10:49 AM

BTW, where is the stupendously super spectacular economy the dear liar solemnly promised we’d be seeing by now?

Galt2009 on December 11, 2012 at 10:49 AM

the CNBC analysis shows that the decline was not unexpected.

Oh for the love of Allah, how could it possibly be “not unexpected”? These buffoons watch the Unemployment rate go up for 40 plus months in a row and every damned month the steady or increasing unemployment rate is Unexpected. They watch the nations economy stall and languish at 1 percent growth and every damned month it’s continuation to languish remains Unexpected.

SWalker on December 11, 2012 at 10:53 AM

BUSH!

ctmom on December 11, 2012 at 10:54 AM

BTW, where is the stupendously super spectacular economy the dear liar solemnly promised we’d be seeing by now?

Galt2009 on December 11, 2012 at 10:49 AM

Don’t worry, the American Economy is poised to take off as soon as we give Obama complete control of the debt ceiling.

Then we can move to a Fairness Economy. We won’t even need to keep these trade statistics anymore.

Curtiss on December 11, 2012 at 10:55 AM

Followed by lackluster sales. You can’t sum up the seasonal sales by one day.

Happy Nomad on December 11, 2012 at 10:47 AM

Apologies HN, I should have slapped a SARC tag on that, or a –Obama/Leftist quote

Gatsu on December 11, 2012 at 10:55 AM

Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on December 11, 2012 at 10:44 AM

Don’t hold your breath waiting. When was the last time liberals owned to any single mistake, besides “bad messaging”?

Archivarix on December 11, 2012 at 10:49 AM

Oh I know, I just stumbled across that comment and decided it fits into most threads that are connected with the dear liar’s screw-ups.

In other words, it’s applicable to most situations.

Galt2009 on December 11, 2012 at 10:56 AM

Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on December 11, 2012 at 10:44 AM

He hasn’t even been in office for 4 years. Give him some time.

Doughboy on December 11, 2012 at 10:56 AM

Do not worry folks taxing the job creators will solve all our problems and spending trillions of dollars we do not have will be very helpful as well…

mnjg on December 11, 2012 at 11:01 AM

Poised to take off.

Cindy Munford on December 11, 2012 at 11:02 AM

Where are all the trolls acknowledging Obama’s ownership of this debacle?

Galt2009 on December 11, 2012 at 10:44 AM

The question is why do we even have Obama trolls on this site to begin with? Free debate? We already know the destructive and stupid talking points of these socialists and communists so why do we need them to stink this forum?

mnjg on December 11, 2012 at 11:04 AM

Are things getting worse or is there just no reason to fudge the numbers anymore?

Night Owl on December 11, 2012 at 11:05 AM

When was the last time liberals owned to any single mistake, besides “bad messaging”?

Archivarix on December 11, 2012 at 10:49 AM

The big problem between the right and the left is that the right works off of principles like “right to work” while the left is only concerned about immediate results such as keeping workers bound to unions. The right talks about entitlement reform while the left claims they are protecting certain classes from ruin.

Rush is right. The problem for the GOP is that you can’t run against Santa Claus by serious ideas about long-term entitlement reform. There are too many greedy stupid lazy parasites for that to be successful.

Happy Nomad on December 11, 2012 at 11:06 AM

I keep feeling that 2013 is going to be a lot worse than ’08/’09 on so many levels. Sadly, I don’t see where we can duck!

CoffeeLover on December 11, 2012 at 11:07 AM

Obama: America on Hold.

tech_sass on December 11, 2012 at 11:10 AM

Black Friday sales were through the roof though, so this really means nothing.

Gatsu on December 11, 2012 at 10:44 AM

Yes, driven in part by record sales of firearms that day.

(Yeah, I know – a drop in the bucket compared to iThings, TVs etc., but still…)

climbnjump on December 11, 2012 at 11:13 AM

Poised to take off.

Cindy Munford on December 11, 2012 at 11:02 AM

Yes, the Obamanation that makes Desolate Administrations economy is indeed poised to take off

SWalker on December 11, 2012 at 11:14 AM

, exports dropped in October by the biggest margin since Obama took office, and the trade gap with China widened to a new record:


…Bush’s fault

Baxter Greene on December 11, 2012 at 11:31 AM

Black Friday sales through the roof. Hmmmm. I wonder how much of the junk was bought on credit? So morons run up their personal debt, and this is somehow good for the economy. Black Friday sales really mean nothing. It is burning down and Dumbo the flying liberal, is going to own it. ” Obama, the crash heard round the world.”

stormridercx4 on December 11, 2012 at 11:34 AM

Yes, driven in part by record sales of firearms that day.

(Yeah, I know – a drop in the bucket compared to iThings, TVs etc., but still…)

climbnjump on December 11, 2012 at 11:13 AM

There were black Friday gun sales?? That is something I would have stood in line for!

Don’t tease me! :)

Gatsu on December 11, 2012 at 11:45 AM

All we need to do is borrow more money, “invest” in green energy; kill fracking and the oil pipeline from Canada; and hire more teachers, policemen, and firemen because we know from Obama’s first term what a boost to the economy this strategy will be.

STL_Vet on December 11, 2012 at 11:49 AM

I’m shocked I tell you, SHOCKED. The 0bama regime pumped and dumped the numbers.

jukin3 on December 11, 2012 at 11:52 AM

The question is why do we even have Obama trolls on this site to begin with? Free debate? We already know the destructive and stupid talking points of these socialists and communists so why do we need them to stink this forum?

mnjg on December 11, 2012 at 11:04 AM

Entertainment value. Plus, it’s good to be reminded of how the left “thinks.” If you can call that thinking.

iurockhead on December 11, 2012 at 11:54 AM

Is there anything that can’t be blamed on Pres. Bush or hurrican Sandy? Geez.

bopbottle on December 11, 2012 at 12:04 PM

iurockhead on December 11, 2012 at 11:54 AM

Left wing sites treat me like a criminal.

1) I have had posts deleted.

2) CBS does not allow me to log on.

3) One or two others have created amusing repertoires that happen to my IP address. They have gotten past my login ID. One even identifies my writing style and zaps my post after I make a lengthy point even if I log on and act lefty for a number of times.

4) This is in addition to the creeps that will track back righties from their emails and ID info if you live near an outpost of liberalism like any major city.

Want attention?

Write and post a humorous a “Jonathan Swift” style satire.

Like nuking and wiping out the population of an oil state to pay off our national debt.

When the squeamish gripe about the long term effects of radiation, offer stats about the arsenal we have gathering dust. I know military and their families who could use some millions and would help me find the stuff that used to be at Aberdeen, Maryland.

Look how much money North Korea makes with their popgun arsenal just threatening to kill millions. Offer your extortion list to ask for donations to help our minority brothers and sisters in Detroit and all the folks who need dental work in the coal areas. Why, U. N. membership is like a prepaid American Express card for this country if we knew what speeches to make.

Healthcare problems? We have 12 to 15 million complete sets of transplant organs that have come to this country and are walking around just waiting to be sold.

I have about seven more in reserve as I keep an even ten ideas ready if any political party shows a need for an innovative candidate.

IlikedAUH2O on December 11, 2012 at 12:35 PM

Hey, keep shopping at WalMart, clowns.

Dave Rywall on December 11, 2012 at 1:21 PM

Nothing Smoot-Hawley II Electric Boogaloo couldn’t fix

tom daschle concerned on December 11, 2012 at 2:01 PM

How long will they blame Hurricane Sandy for everything bad?

Jack_Burton on December 11, 2012 at 2:19 PM