Chart of the week: US trade balance

Summary: The US trade deficit for December 2012 was the narrowest since January 2010

What the chart shows: The chart shows the US trade balance – exports minus imports – in millions of dollars.

Why is the chart interesting: US exports were surprisingly strong in December, rising by 2.1% from November, while imports fell by 2.7%. The data is important, both because it shows that the recent improvement in the US foreign balance continues, if erratically; and because it is likely to lead to a revision of the Q4 economic growth data. Last month the bureau of economic analysis said that the US economy shrank by 0.1% in Q4 2012. (Note that American growth numbers are given as the seasonally adjusted annualised rate of change from the previous quarter; in Europe, where the number is usually given as the quarterly change, the US number would have been -0.025%, ie, no change.) The unexpectedly strong trade numbers probably mean that this will be revised to show a small positive figure instead.

Chart and comments provided by Stein Brothers (UK), www.steinbrothers.co.uk.