U.S. December trade balance little changed, Canada's moves into deficit in December
December’s US trade deficit of $62.2bn was in line with expectations and while slightly wider than November’s $61.9bn, November’s deficit was revised down from $63.2bn. Canada’s December trade deficit of C$0.3bn was however weaker than expected, falling from a November surplus of C$1.06bn.
US data showed exports up by 1.5% and imports up by 1.3%. Goods saw exports rise by 1.8%, below a 2.5% gain seen in advance data, and imports up by 1.5%, above the 1.3% advance figure. Autos were notably weak in both series through Q4, particularly so for exports, probably connected to strikes in October. In real terms exports were strong with a rise of 3.7% while imports rose by 1.8%. Services saw exports rise by 1.0% and imports rise by 0.8%.
Canada’s goods data showed exports falling by 1.9% and imports rising by 0.2% to deliver the first monthly deficit since July. In real terms exports fell by 0.4% and imports rose by 1.3%. In real terms exports rose by 1.0% (not annualized) in Q4 after a 0.4% Q3 decline while imports fell by 0.5% for the second straight quarter, meaning that despite the weaker December data. net exports will be a positive in Q4 GDP. Energy led Q4’s strength in exports and autos led Q4’s weakness in imports.