US Trade Balance Deficit Narrows. The United States (US) trade balance deficit unexpectedly narrowed in November 2023, driven by an increase in services exports and a decrease in merchandise imports.
The US Department of Commerce reported that the US goods and services trade balance deficit shrank 2% to US$63.2 billion from US$64.5 billion in the previous month. This deficit figure is lower than the median estimate in a Bloomberg survey of economists which estimated a trade balance deficit of US$64.9 billion.
This deficit figure was obtained from exports reaching US$253.74 billion and imports amounting to US$316.9 billion. Both fell 1.9% compared to the previous month and are not adjusted for inflation.
Despite the decline in November, merchandise imports remained elevated against the backdrop of strong consumer spending. At the same time, demand for US-made goods is constrained by volatile overseas economies.
Before the trade balance report was released, the Federal Reserve Bank of Atlanta’s GDPNow estimate expected the trade balance to be 0.23 percentage points short of fourth-quarter growth.
On an inflation-adjusted basis, the goods trade deficit narrowed to US$84.8 billion in November, the lowest level in three months. The decline in imports of goods reflects declines in inventories of industrial, consumer goods and capital equipment.
US exports were held back by declines in shipments of vehicles, industrial equipment and consumer goods. US Trade Balance Deficit Narrows