Three of the four biggest months for U.S. trade ever are the latest three months, according to my analysis of government data released Friday.
More trade occurred in March than any month in U.S. history, with May third and April fourth all-time. The Census Bureau data released Friday covers through May.
That strength is not coming from the usual suspects. This will present another data set for financial markets and economists to digest, who are still wrestling with whether inflation is picking up only short-term or more long-term.
On the import side, motor vehicles, often the leading U.S. import, are off 22.62% from pre-pandemic total registered in May of 2019. That’s $3.45 billion.
The value of crude oil, the second-ranked import, was off 21.82% from May 0f 2019. That’s equal to $2.92 billion. The value of gasoline and other refined petroleum products, the seventh-ranked import, is down $514.02 million from May of 2019.
On the export side, the category led by civilian aircraft, which had ranked first for 76 consecutive months, has ranked second to oil three of the last five months, with May totals down 43.35% from the same month in 2019, before the pandemic.
Even oil, one of the nation’s fastest-growing exports, is down 5.13% from May of 2019. Motor vehicle parts, a key cog in the automotive supply chain, have yet to recover fully from the pandemic and are down $997.79 million, or 25.05%, from May of 2019.
So how to explain the record growth in U.S. trade?
The growth on the export side, when comparing May of this year to May of 2019, is from:
- No. 5-ranked natural gas and other petroleum gases, up $2.06 billion, 79.08%,
- No. 6 computer chips, up $1.46 billion, 45.87%,
- No. 9 vaccines, plasma and other blood fractions, up $934.31 million, a robust 45.86% from May two years ago.
- No. 13-ranked corn, up 172.14%, equal to $1.5 billion.
- No. 17 platinum, up $1.07 billion, 301.32% from May 2019.
To be clear, May 2019 was no slouch of a month. It was the second biggest May in history for U.S. exports, behind only May of 2021, and the 12th-busiest of all time. Overall exports increased a meager 1.07% between May 2019 and May 2021.
On the import side, if not cars and oil, then what? And do these fast-growing imports suggest inflationary pressures?
Well, the effects of Covid-19 can still be seen in several high-flyers, including two that registered values in May of 2021 more than $1 billion above the May 2019 total.
- No. 18, a primary lumber category that has been well-publicized for being caught up in the supply chain shortage brought on by home repairs and other construction,. was up $1.33 billion in May, an increase of 245.14% over May of 2019.
- No. 21 platinum is up $1.16 billion, an increase equal to 255.83%.
- No. 3 computers are up $799.71 million, a less stratospheric 9.84% that is nevertheless slightly better than twice the rate of growth for all U.S. imports. Technology tends not to be hit by inflation; in fact, it is often quite the opposite, In this case, think home offices needing to be outfitted. Still. One year after the pandemic struck.
- No. 10 computer chips were up $948.57 million in May, when compared to May of 2019, an increase of 35.26%.
- No. 30, a category dominated by non-surgical rubber or latex gloves, was up $982.40 million, an increase of 418.42%. Think all those people wearing those blue gloves to serve you.
- No. 40 exercise and gym equipment, is pumped up as well, increasing $525.35 million, a 87.07% jump. More than a few people didn’t like what they saw in that full-length mirror while stranded at home — and those sales seem to still be strong.
As was the case with exports, on the import side, it isn’t like May 2019 was a down year, making it easier to post big percentage gains this May. May of 2019 was the sixth biggest month in U.S. history.
Given the strong month of May, it should come as no surprise that U.S. trade is still running at a record pace, with overall trade at $1.79 trillion, a 4.36% gain on the record pace set in 2019. Exports stood at $692.28 billion through May, up a sliver, 0.83% above the 2018 record pace. Imports topped $1.09 trillion, an increase of 6.55% over the 2019 pace.
For the first time ever, the U.S. trade deficit topped $400 billion in the first five months of a year, ending at $401.34 billion. The percentage of trade that is a U.S. export, which tends to run somewhat parallel to the trade deficit, was at its lowest level since 2008, at 38.76%.