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Wishful thinking expanding, but the trade data are flat
Howard Richman, 11/10/2011

If you rely upon CNBC for your  economic analysis, you probably think that the trade deficit improved dramatically in September. However, according to the actual data released this morning by the Commerce Department, any changes in the actual trade deficit were negligible. According to the enthusiastic CNBC report:

The U.S. trade deficit unexpectedly shrank in September to its narrowest level since December on record-high exports, while the flow of imports from China slowed.

The seasonally adjusted trade deficit was $43.1 billion, down from a revised $44.9 billion in August, the Commerce Department said on Thursday. Analysts had expected the trade deficit to widen to $46 billion. U.S. exports rose 1.4 percent to a record-high $180.4 billion, while imports were $223.5 billion.

Imports from China, which are not seasonally adjusted, fell to $36.4 billion in September from $37.4 billion a month earlier, narrowing the trade deficit with that country to $28.1 billion.

In reality, the U.S. trade deficit with China set yet another 12-month record, worsening slightly from $289.0 billion for the 12 months ending in August to $289.2 billion for the 12 months ending in September, as shown in the chart below:

ChinaThru0911.gif

On the other hand the 12 month trade deficit with the world did improve slightly, moving from $538.3 billion for the 12 months ending in March to $537.4 billion for the 12 months ending in April, as shown in the graph below:

Worldthru0911.gif

 The good news is that the trade deficit did not get worse in September. Although wishful thinking has been expanding among commentators lately, the actual trade data is basically flat.

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