The September 2011 U.S. trade deficit decreased $1.81 billion to $43.11 billion. This is 4.03% drop from last month in the trade deficit. August's trade deficit was revised down from $45.61 billion to $49.92 billion. Exports increased $2.5 billion, or 1.41%, while imports increased $688 million, or 0.31%. The China-U.S. trade deficit, not seasonally adjusted, decreased from it's August $28.96 billion record high to $28.06 billion.

 

 

Below is the raw customs basis accounting of the trade deficit with China, not seasonally adjusted. China alone was 45.29% of the goods trade deficit for September. This includes oil. For comparison's sake the not seasonally adjusted goods trade deficit by Census accounting methods was $61.95 billion.

 

 

For the 2011 year to date, the trade deficit with China is $217.38 billion. China is 39.95% of the total goods accumulated trade deficit, which again includes petroleum imports on aggregate. The trade deficit with China for 2011 has already exceeded the September 2010 accumulated China-U.S. trade deficit of $201.60 billion by $15.78 billion or 7.83%. We have 3 months to go for 2011. The record trade deficit for China of 2010 was $273.06 billion. Assuming $28 billion for the next 3 months, assuming the same cyclical pattern of 2010, of monthly trade deficits with China, we're looking at a potential $300 billion 2011 China-U.S. trade deficit. The annual China-US trade deficit is graphed below.

 

 

Oil related imports increased $375 million with a petroleum end use trade deficit of $26.33 billion, for September, or 45.5% of the goods trade deficit. This is essentially another flat line change from August.

By the more specific to import types NAICS codes, not seasonally adjusted, oil and gas were 40% of the goods trade deficit, or $23.45 billion. Assuming China has very little oil and gas exports to the United States, if one subtracts off oil and gas from the goods trade deficit, China becomes roughly 73% of the non-oil and gas goods trade deficit.

The United States basically has two major ongoing problems with the trade deficit, Chinese goods and Oil imports. Below is the not seasonally adjusted import price index for oil fuel. In September the average price for a barrel of oil was $101.02, down from August's price of $102.62.

 

 

Below are imports vs. exports of goods and services from January 2007 to September 2011. Notice how much larger imports are than exports, but also notice the growth, or rate of change between months of U.S. exports over time. To state the obvious, imports subtract from GDP and exports add. This month's jump in exports should help with Q3 GDP revisions, unlike wholesale inventories.

 

 

Below is the list of good export increases from August to September, seasonally adjusted. Thems gold in their hills. Non-monetary gold exports increased $1.553 billion in a month. Gold was 66% of the total export increases for September. What's up with that?

• Automotive vehicles, parts, and engines: +$0.190 billion
• Industrial supplies and materials: +$1.358 billion
• Other goods: -$0.59 billion
• Foods, feeds, and beverages: -$0.48 billion
• Capital goods: +$0.130 billion
• Consumer goods: +$0.777 billion

Exhibit 7 gives Census accounting method breakdown for exports.

Here are the goods import monthly changes, seasonally adjusted. Again, nothing broke $1 billion which is unusual for imports.

• Industrial supplies and materials: +$0.879 billion
• Capital goods: -$0.432 billion
• Foods, feeds, and beverages: +$0.236 billion
• Automotive vehicles, parts, and engines: +$0.461 billion
• Consumer goods: -$0.204 billion
• Other goods: -$0.572 billion

Running a trade deficit in advanced technology is not a good sign for those jobs of tomorrow. This month had a decline of $816 million in this deficit. The advanced technology trade deficit usually increases almost every month, meaning we are literally outsourcing America's future, so this decline is welcome news. The advanced technology trade data is not seasonally adjusted.

Advanced technology products exports were $24.2 billion in September and imports were $32.5 billion, resulting in a deficit of $8.3 billion. September exports were $0.4 billion more than the $23.9 billion in August, while September imports were $0.4 billion less than the $33.0 billion in August.

Here is the breakdown with major trading partners, not seasonally adjusted. China is the worst trade deficit, with $28 billion. We are China's export dumping ground.

OPEC can be assumed to be oil and it decreased for September, but is not seasonally adjusted. The OPEC nations are: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela. OPEC accounts for about 51.5% (customs basis), of all crude oil imports by nation and is 16.8% of the total goods trade deficit this month. Still we see every month, our problem is clearly China and oil imports. The amounts in parenthesis are August's deficit figures. Notice how the trade surplus list is super short.

The September figures show surpluses, in billions of dollars, with Hong Kong $4.3 ($2.4 for August), Australia $1.4 ($1.4), Singapore $1.3 ($1.0), and Egypt $0.1 ($0.4). .

Deficits were recorded, in billions of dollars, with China $28.1 ($29.0), OPEC $10.4 ($13.3), European Union $6.4 ($9.0), Japan $5.2 ($6.7), Mexico $5.0 ($5.5), Germany $4.3 ($4.5), Canada $3.5 ($2.4), Ireland $2.3 ($2.9), Venezuela $2.0 ($3.0), Nigeria $1.9 ($3.0), Korea $1.5 ($0.7), and Taiwan $1.5 ($1.6).

In 2008, we broke monthly total trade deficit figures of $60 billion. This includes goods and services.

Here is August's report overview (unrevised, although graphs are updated). Here is the BEA website for additional U.S. trade data.

You might ask what are these Census Basis versus Balance of Payment mentioned all over the place? The above mentions various accounting methods so we're comparing Apples to Apples and not mixing the fruit. The trade report in particular is difficult due to the mixing of these two accounting methods and additionally some data is seasonally adjusted and others are not. One cannot compare values from different accounting methods and have that comparison be valid.

In a nutshell, the Balance of Payments accounting method is where they make a bunch of adjustments to not count imports and exports twice, the military moving stuff around or miss some additions such as freight charges. The Census basis is more plain raw data the U.S. customs people hand over which is just the stuff crosses the border. The 2005 chain weighted stuff means it was overall modified for a price increase/decrease adjustment in order to remove inflation and deflation time variance stuff.

Bottom line, you want just the raw data of what's coming into the country and going out, it's the Census basis and additionally the details are only reported in that accounting format. Additionally the per country data is not seasonally adjusted so watch out trying to add those numbers into the overall trade deficit. It's a statistical no-no to mix seasonal and non-seasonally adjusted numbers.

The Census is also getting into the graphing game with some nice pie charts breaking down exports by country, as well as a chart showing petroleum as an overall percentage of the trade deficit.