There was some bad economic news this morning from the Bureau of Economic Analysis (BEA) showing that the US trade deficit increased in December to $67.4 billion. Exports declined by $2.2 billion to a level of $250.2 billion and imports rose $4.2 billion to $317.6 billion.
Part of the bad news was that the surplus in intangibles shrank slightly in December as imports increasing more than exports. The trade surplus in intangibles had increased in the past 4 months.
For the year, the increase in the 2022 intangible surplus of $15.5 million is well below the $47.4 million increase recorded in 2021. But better that the actual decline in the intangible surplus of -$7.6mmillion in 2020. In aggregate, the intangibles trade surplus took a hit in 2020 (like almost everything), rebounded in 2021, and settled down to basically the historical trend line in 2022.
However, the sectoral data shows a slight shift in the composition of the surplus. The trade surplus in Financial Services held steady in 2020 and actually grew in 2021 before reverting to historical levels in 2022. Revenue from Intellectual Property fluctuated around the flat trendline of the past decade and a half. Business Services is the star of the show, growing especially strong in the past 10 years. Revenue from Maintenance and Repair Services dropped dramatically at the beginning of the pandemic and have not recovered. Interestingly, the trade deficit in Insurance sharply declined then rapidly grew again between 2018 and 2019 before flatting out in 2020.