BEA's trade data for April released this morning shows a slight increase in the deficit -- up $700 million to $29.2 billion -- even though both imports and exports declined. As both the Wall Street Journal and the New York Times report, the numbers were about what was expected -- reflecting the slowdown in the global economy. The March and April figures, however, reverse the trend since last July of the slowdown resulting in a reduction of the deficit. This may be due to increased imports of oil as prices rise.
Our intangibles trade surplus also moved in the wrong direction - dropping slightly in April by $160 million to $11.68 billion. Exports of both private business services and royalties were down and imports in both categories were up.
The really bad news was that our deficit in Advanced Technology Products surged in April - rising to $4.7 billion. Imports were steady but exports in every area, except biotechnology, dramatically slowed. The last monthly surplus in Advanced Technology Products was in June 2002 and the last sustained series of monthly surpluses were in the first half of 2001.
The other release today from BEA contains the revisions for 2006 to the present. The intangibles balance for 2006 was revised downward by $4.4 billion -- or 4.4%. The data for 2007 and 2008 were revised by much smaller amounts -- upward by $900 million (0.6%) and downward by $1.8 billion (1.2%) respectively. I don't know if the relatively large revision for the 2006 data represents simply catching up to better data collection activities. As I noted last year, BEA is undertaking a number of activities to improve the data on intangibles and the knowledge economy.
On the other hand, the difference in the size of the revisions may reflect the delay in the data. The new 2006 data may just now be available and the 2007 and 2008 figures may be subject to larger revisions in the future as new data comes in. The data for the second half of 2008 was already revised earlier this year by roughly $3 billion (see earlier posting). We will have to see what the size of the next set of revisions is to see whether BEA's efforts can reduce the size of the uncertainty in the data.
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.
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