A bigger trade deficit is an awkward scorecard for competition when its components measure different transactions. The March 7, 2017 Census Bureau and Bureau of Economic Analysis release reported January consumer-goods imports rising $2.4 billion on a Census basis. Cell phones and other household goods, a combined category, accounted for a $1.0 billion increase. That is import value, not evidence of lower retail prices or greater market rivalry. [BEA 17-09]

On the export side, January capital goods fell $1.9 billion, including a $0.6 billion decline in civilian aircraft. The February 7 release had reported December capital-goods exports rising $3.3 billion, including increases of $1.0 billion each in civilian aircraft and engines. The reports’ methodology warns that aircraft trade is highly variable, making separate examination useful for readers studying trends. [BEA 17-06][BEA 17-09]

All those monthly category movements are seasonally adjusted nominal dollar values. They are not aircraft counts, customer orders or measures of competitive strength. The December and January figures also retain different release vintages, and January introduced end-use reclassifications affecting category levels. The two releases are complementary records from one statistical chain, not independent tests of a market explanation. [BEA 17-06][BEA 17-09]

Our market interpretation is to examine the transactions before judging the balance. For household goods, a competition inquiry would need prices, choices and barriers facing sellers. For aircraft, it would need information about deliveries and the businesses involved. Combining their dollar movements into a national deficit cannot answer either inquiry. The contrasting categories identify where to look, rather than which industry won or lost. [BEA 17-06][BEA 17-09]

Source documents

  1. U.S. International Trade In Goods And Services, January 2017https://www.bea.gov/news/2017/us-international-trade-goods-and-services-january-2017
  2. U.S. International Trade in Goods and Services, December 2016https://www.bea.gov/news/2017/us-international-trade-goods-and-services-december-2016