Trade Numbers Point to 4Q Growth

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, both as the result of rising exports and dropping imports.

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, both as the result of rising exports and dropping imports. The downward movement of the deficit was something of a surprise, and may indicated that the American economy did in fact growth during the fourth quarter (import and export statistics are unavailable with the government makes its first estimate of GDP).

In any case, December exports were $3.9 billion more than November exports, which came in at $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 slightly downtick in the price of oil, but a decline in non-petroleum imports was a factor as well. The trade deficit with China is still a mainstay of the overall trade deficit. It increased from $23.1 billion in December 2011 to $24.5 billion in December 2012.

Rail shipments of construction materials up

The Association of American Railroads said on Friday that intermodal traffic in January 2013 totaled 1.168 million containers and trailers, up 5.3 percent compared with January 2012. Carloads originated in January totaled 1.339 million carloads, down 6.3 percent compared with the same month last year.

The AAR’s measurement of cargo volume by rail is an indirect indication of economic activity nationwide, since during growth periods 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 of one kind or another.

The outlook for rail cargo is relatively good, if the behavior of the railroads themselves is 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 press statement. “They’re making these investments because they are confident that demand for freight transportation, over the long term, will continue to grow.”

Gas continues upward trajectory

As of Sunday, according to the AAA Daily Fuel Gauge Report, a regular gallon of gas in the United States averaged $3.582, reflecting a rapid rise since a week before, when it was $3.518. A month ago, a gallon sold for an average of 3.313. Some increases are normal this time of the year, as refineries switch to produce summer-blend gasoline, which restricts supplies for a while, but a number of refineries have shut down or slowed down unexpectedly in recent weeks.

Wall Street ended the week on Friday on a chipper note, though not enough to break any records. The Dow Jones Industrial Average was up 48.92 points, 0r 0.35 percent, while the S&P 500 gained 0.57 percent and the Nasdaq advanced 0.91 percent.