Economy Watch: Shrinking Trade Gap Points to Q4 Growth; Railroads Ship More Construction Materials
- Feb 11, 2013
The U.S. Department of Commerce reported on Friday that the U.S. trade deficit dropped from $48.6 billion in November to $38.5 billion in December, as the result of both rising exports and falling imports. The decline was something of a surprise, and may indicate that the economy grew during the fourth quarter (import and export statistics are unavailable when the government makes its first estimate of gross GDP).
In any case, December exports were $3.9 billion more than November exports, which totaled $182.5 billion. December imports were $6.2 billion less than November imports, which came in at $231.1 billion. Compared with December 2011, exports are up 4.8 percent and imports are down 2 percent.
The decrease in December was partly because of a decline in petroleum imports, and a slight downtick in the price of oil, but a decline in non-petroleum imports was a factor as well. The trade gap with China is still a mainstay of the overall trade deficit. It grew from $23.1 billion in December 2011 to $24.5 billion in December 2012.
Rail Shipments of Construction Materials Rise
The Association of American Railroads said on Friday that intermodal traffic in January 2013 totaled nearly 1.2 million containers and trailers, up 5.3 percent compared with January 2012. Carloads originated in January totaled more than 1.3 million, down 6.3 percent year over year.
The AAR’s measurement of cargo volume by rail is an indirect indication of economic activity nationwide, since during periods of growth, cargo movement tends to be more robust. The movement of some commodities can also point to activity in specific industries. For example, the latest AAR numbers showed that carloads of crushed stone, gravel and sand were up 6.1 percent year-over-year, and lumber and wood products were up 14.6 percent. All are used in construction.
The outlook for rail cargo is relatively good, if the capital programs of the rail carriers themselves are any indication. “Railroads recently announced that they expect to reinvest significantly in 2013 — an estimated $24.5 billion for the year — back into their systems,” AAR senior vice president John T. Gray noted in a statement. “They’re making these investments because they are confident that demand for freight transportation, over the long term, will continue to grow.”
Gas Prices Climb Again
As of Sunday, according to the AAA Daily Fuel Gauge Report, a gallon of regular gas in the United States averaged $3.582, reflecting a rapid rise since the previous week, when it was $3.518. A month ago, a gallon sold for an average price of $3.313. Some increases are considered normal this time of year, as refineries switch to produce summer-blend gasolines, which temporarily restricts supplies. However, a number of refineries have shut down or slowed down unexpectedly in recent weeks.
Wall Street ended the week on a chipper note, though not enough to break any records. The Dow Jones Industrial Average was up 48.92 points on Friday, a 0.35 percent increase, while the S&P 500 gained 0.57 percent and the Nasdaq advanced 0.91 percent.