Not quite as good as the headline fall suggests.

That is my initial take on the March US trade numbers

China didn’t surprise by the way.  It posted another $10 billion plus trade surplus in April -- $10.5 precisely.  Exports were up 23.9% y/y; imports increased by a much smaller 15.3% y/y.  For all the talk about rebalancing Chinese growth, the data so far suggest that China is becoming more, not less, dependent on exports – and that its trade surplus is poised to increase further.

The US trade deficit dipped to $62 billion in March.   That wasn’t expected.  Certainly not by me.  I probably spent too much time looking at the Asian data, and too little looking at oil … 

More on that later.

The deficit improved because of strong exports.   The export numbers are as good as they look.  Broad across the board gains.    Aircraft are doing fine – the US exported about $10b of planes in q1, v $6b a year ago.   But Boeing didn’t drive the data.  March aircraft exports were a bit below February exports.   The US sold a lot more electronics.

And the deficit improved because of an unusual fall off in imports.

Non-oil goods imports did not bounce back strongly from their February total of $125.3b (s.a.).  March exports were $126b.  I had expected a higher number, something a bit closer to the (high) January number of $130.3b.  I wonder a bit about the seasonal adjustment – overall goods imports (not seasonally adjusted) were $154.2b in March, v $136.3b in February.  

But the main reason for the better-than-expected deficit: oil

That’s right.  Oil.  Oil imports fell.