By: Lam
Overall, the deficit of goods and services is up $1.9 billion from $40.3 billion in September (revised) to $42.2 billion in October. Specifically, exports decreased $6.8 billion from $187.3 billion in September (revised) to $180.5 billion in October. Imports went from $227.6 billion in September (revised) to $222.8 billion in October resulting in a $4.9 billion decrease.
Major contributors to the decrease of goods exports include industrial supplies and materials ($2.9 billion), capital goods ($1.9 billion) and foods, feeds, and beverages ($1.4 billion). For goods imports, the major contributors to the decrease in October were consumer goods ($3.6 billion). We also saw a slight increase for other goods ($0.2 billion) for exports and industrial supplies and materials ($0.4 billion) for imports.
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Economic Impact of Mississippi River Drought
The worst drought since 1956 hit the nation this year adversely affecting the Mississippi River’s water level and goods shipments. Even with the precipitation from hurricane Isaac, the water level on the Mississippi is still decreasing. According to the New York Times, the reduction of the water flow from Missouri (an annual occurrence that started on November 11, 2012), coupled with the drought, will not help with the dropping water level on the river. Cargo ships will either temporarily cease transporting goods down the river or reduce the load in which they can carry to compensate for the low water level.
Source: National Oceanic and Atmospheric Administration
Ceasing transporting goods or reducing the number of goods transported on the Mississippi River could potentially affect the $50.5 billion (vessel value) exports out of the New Orleans district in 2012 through October alone. Out of the $50.5 billion (vessel value) exports in 2012, some of the major exports include petroleum, soybeans, corn, coal, light oils, and wheat. Within the New Orleans district, top performing ports such Gramercy, New Orleans, and Morgan City in Louisiana could be affected by the low water level. A full list of ports within New Orleans and other district, import and export data, and more are available on USA Trade Online.
