U.S. Trade Picture in 2013–The Role of Petroleum

According to recent data published by the Bureau of the Census, the U.S. trade deficit in goods is shrinking.  Why?  The table below provides part of the answer.  Using data through August 2012 and 2013 , it shows trade balances in both petroleum and non-petroleum goods.  Both are in deficit; that is, imports exceed exports.  However, the deficit for petroleum products has declined by approximately $41 billion while the deficit for non-petroleum products has expanded by approximately $10 billion.  The net effect of these trends is that through August 2013, the balance in goods (excluding certain Census adjustments) has shrunk by $31 billion compared to last year.  This suggests that increased U.S. production of energy, not improved productivity or in-sourcing, is the main driver of the change in U.S. trade flows thus far in 2013.