The U.S. trade deficit shrank by $2.5 billion in April to $50.1 billion, according to BEA data released this morning. Exports fell by $1.5 billion while imports were down by $4.1 billion. Imports of petroleum and non-petroleum goods were down, as were exports of non-petroleum goods. Curiously, exports of petroleum goods were up slightly. The decline was in line with economists' expectation of a $49.4 billion dropped (according the Wall Street Journal). But the data suggest continued weakness in the global economy.
Our trade surplus in intangibles declined slightly in April, dropping by $157 million (from March's revised level) to just over $13 billion. [Note that is about $1 billion less than reported last month - the change is due to the annual data revisions - see below]. The surplus in royalty payments increased slightly, with both exports (payments received) and imports (payments paid out) up. But business services saw a more than offsetting decline, with exports down and imports up.
Consistent with the overall trend, the deficit in Advanced Technology Products also dropped somewhat in April to $6.7 billion. The improvement was mostly due $2.4 billion drop in information and communications technology (ICT) imports -- which offset a decline in aerospace exports. 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.
Also released today were the annual revisions going back to 2009. In general, the revision increase the size of the surplus in the mid-2009 to mid-2011 time period and reduce the surplus in the latter part of 2011. That description holds true for both imports and exports and for royalty payments and business services. Revised chart of the annual data are presented below.
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.