Increase in Trade Deficit Driven by Smartphones?

Trade Balance (November 2012)

– Deficit for November was $48.7 billion.  Previous was $42.1 billion.

Exports rose $1.8 billion month/month.  Imports rose $8.4 billion month/month.  The bump in imports may have been a spike due largely to imports of iPhone 5’s and Samsung Galaxy S3’s.

This is the eXports – iMports component of GDP.  All other things being equal an increasing trade deficit decreases GDP. Practically speaking if consumer spending (purchase of those smartphones) increases, the increase in imports offsets most of the increase in consumer spending and GDP remains flat.

Details from the U.S. Census Bureau are here http://www.census.gov/indicator/www/ustrade.html

Import/Export Prices (December 2012)

Export Prices – Month/Month -0.1% Export Prices – Year/Year 1.1% Import Prices – Month/Month -0.1% Import Prices – Year/Year -1.5%

Inflation remains well-contained.