MNI DATA ANALYSIS: US January Trade Gap Widened To $56.6b>

--Census Goods Gap $75.3b Vs $74.4b Advance Estimate

--4Q Productivity Rev Up To Flat, Unit Labor Costs Rev Up To +2.5%

By Kevin Kastner and Holly Stokes

     WASHINGTON (MNI) - The U.S. international trade gap widened to 

$56.6 billion in January, a wider gap than the $55.1 billion deficit 

expected and the largest since October 2008, data released by the 

Commerce Department Wednesday morning showed. 

     The wider trade gap reflected a large decline in exports, as 

imports were roughly flat. Higher energy imports offset a reversal in 

cell phone imports after a December gain.

--CENSUS GAP LARGER THAN ADVANCE

     The revised Census goods gap reported Thursday was larger than the 

advance estimate of $74.4 billion, coming in at $75.3 billion. 

     The overall BOP goods gap widened sharply to $76.5 billion from 

$73.7 billion in December, while the services surplus widened 

modestly to $19.9 billion from $19.8 billion in December. 

     The chained goods gap widened to $69.7 billion from $68.5 billion 

in December.

     The petroleum gap widened sharply to $7.1 billion in January from 

$3.3 billion in December, with exports down modestly and imports up 

sharply. The nonpetroleum gap narrowed to $68.2 billion from $69.0 

billion. 

--HIGHER CRUDE, LOWER PHONES

     Imports were roughly flat in the month due to offsetting factors. 

There was a solid $2.0 billion increase in industrial supply imports, 

led by a $2.2 billion jump in crude oil imports. The unadjusted crude 

oil price was the highest since January 2015. 

     However, this was offset by a $1.3 billion drop in capital goods 

imports and a $900 million drop in consumer goods imports, led by a $1.2 

billion decline in cell phone imports after an increase in the previous 

month. Imports of autos and food were both roughly flat.

     Exports plunged on a $2.6 billion drop in capital goods, 

particularly civilian aircraft, and a $1.3 billion decline in industrial 

supply exports. This was offset by a $1.2 billion rise in consumer goods 

exports.

     The unadjusted bilateral trade gap with China rose to $36.0 

billion in January from $30.8 billion in December and $31.3 billion a 

year ago, hitting its highest point since $36.3 billion in September 

2015. There were also wider gaps with Canada and Japan, while the gaps 

with Mexico and the EU narrowed.

--UNIT LABOR COSTS STRONGER

     In other data released Thursday, fourth quarter nonfarm 

productivity was revised up slightly to a flat reading, but more 

importantly unit labor costs growth was revised solidly higher to a 

2.5% pace.

     In addition, third quarter productivity is now up 2.6%, slightly 

lower than the 2.7% gain previous reported. At the same time, unit labor 

cost growth was revised up to a 1.0% rate for the quarter from a 0.1% 

decline previous reported, so the report overall reflects a stronger 

pace of labor cost growth than previously suggested.

     Productivity now stands up 1.1% from a year earlier, compared 

with a 1.4% pace in the third quarter. Unit labor costs were up 1.7% 

year/year in the fourth quarter, a sharp improvement after 

declines in the previous two quarters.

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]