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June 10, 2005
April trade in intangibles
The overall trade deficit rose significantly in April as both imports and exports surged to record levels, the BEA reported this morning.
Early news reports of the deficit had a mixed tone. On the one hand, the New York Times reported "U.S. Trade Gap Widens, but Less Than Expected":
The U.S. trade deficit widened less than expected in April to $57.0 billion, as both exports and imports set records, the Commerce Department said on Friday. The monthly trade gap expanded 6.3 percent from March, but was below the median forecast of $58 billion from a group of 35 economists surveyed before the report.
On the other hand, the Washington Post reported "Trade Deficit Shoots Up to $56.96B in April":
The U.S. trade deficit shot up 12 percent in April to $56.96 billion, reflecting a surge in oil imports to the second highest level on record, the government reported Friday.
The Commerce Department said the new trade imbalance increased from a $53.56 billion deficit in March as imports rose 4.1 percent to a new record, swamping a 3 percent increase in U.S. export sales, which also set a record.
So far this year, the trade deficit is running at an annual rate of $686 billion, 11 percent higher than the record $617.58 billion deficit set for all of 2004.
Both exports and imports of of intangibles grew to record levels, exports by .54% and imports by 1.3%. But the balance of trade in intangibles stayed essentially the same at a revised $7.2 billion.
We also continue to run a deficit in Advanced Technology Products. The deficit was larger in April than in March - but not as large as during January or Feburary. The last monthly surplus in this category was in June 2002 and the last sustained series of monthly surpluses were in the first half of 2001.
Note: we define trade in intangibles as the sum of "royalties and license fees" and "other private services". The BEA/Census Bureau definitions of those categories are as follows:
Royalties and License Fees - Transactions with foreign residents involving intangible assets and proprietary rights, such as the use of patents, techniques, processes, formulas, designs, know-how, trademarks, copyrights, franchises, and manufacturing rights. The term "royalties" generally refers to payments for the utilization of copyrights or trademarks, and the term "license fees" generally refers to payments for the use of patents or industrial processes.
Other Private Services - Transactions with affiliated foreigners, for which no identification by type is available, and of transactions with unaffiliated foreigners. (The term "affiliated" refers to a direct investment relationship, which exists when a U.S. person has ownership or control, directly or indirectly, of 10 percent or more of a foreign business enterprise's voting securities or the equivalent, or when a foreign person has a similar interest in a U.S. enterprise.) Transactions with unaffiliated foreigners consist of education services; financial services (includes commissions and other transactions fees associated with the purchase and sale of securities and noninterest income of banks, and excludes investment income); insurance services; telecommunications services (includes transmission services and value-added services); and business, professional, and technical services. Included in the last group are advertising services; computer and data processing services; database and other information services; research, development, and testing services; management, consulting, and public relations services; legal services; construction, engineering, architectural, and mining services; industrial engineering services; installation, maintenance, and repair of equipment; and other services, including medical services and film and tape rentals.
Posted by Ken Jarboe at June 10, 2005 9:13 AM
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