Some good news in today's release from BEA of the September trade figures: the deficit declined by $1.8 billion to $43.1 billion. Exports rose by $2.5 billion while imports were up by $0.7 billion. Economists had expected the deficit to grow to $46 billion.
The data for August was also slightly better than earlier reported (see previous posting). Rather than no changed in the trade deficit in August, the deficit actually declined slightly as exports grew, rather than declined as previously estimated.
The deficit in advanced technology goods also improved somewhat in September. The biggest change was an increase in exports and a decrease in imports of information and communications technology -- which offset an increase in imports and a decrease in exports in aerospace. Interestingly, imports of nuclear technology and opto-electronics also increased significantly while imports of biotechnology decreased significantly. 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 small bit of bad news is that the surplus in intangibles declined ever so slightly to $14.372 billion. This is the first decline in our intangibles surplus since February 2010. The change was due to a drop in exports of business services (imports of business services declined as well but not by as much as exports). The surplus in royalty payments increased by a very minor amount with exports (payments received) rising faster than imports (payments sent out).
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.