The February 2011 U.S. trade deficit decreased $1.2 billion to $45.8 billion. The January 2011 monthly trade deficit was $47 billion, revised up from $46.3 billion. $26.7 billion of this deficit is oil related, $0.9 billion less than 1 month ago, and 44.1% of the total goods trade deficit. Both imports and exports dropped, with imports declining $3.6 billion, or 1.7% and exports dropping $2.4 billion, or 1.4% for February.

For the year, the trade deficit increased $6.0 billion with exports increasing 14.2% and imports increased 14.4%.

What February shows is a slowing of trade flows and a decrease in oil demand. This implies a slowing economy, taking into account China's holiday, due to the deceleration of overall trade during February.

Imports were 1.28 times larger than exports for February. In other words, for every dollar we export, we import $1.28 worth of stuff. This is on a Balance of Payments basis.

The United States basically has two major problems with the trade deficit, Chinese goods and Oil imports.

Below are imports vs. exports of goods and services from January 2007 to November 2010. Notice how much larger imports are than exports, but also notice the growth, or rate of change between months of U.S. exports.

Below is the list of good export decreases from January to February, seasonally adjusted. Industrial supplies includes oil and petroleum related products.

• Automotive vehicles, parts, and engines: -$1.02 billion
• Industrial supplies and materials: -$0.57 billion
• Other goods: -$0.5 billion
• Foods, feeds, and beverages: -$0.16 billion
• Capital goods: -$0.30 billion
• Consumer goods: -$0.17 billion

Exhibit 7 gives Census accounting method breakdown for exports. Last month, autos had a $1.3 billion increase in exports. What we see is an across the board slow down, with capital goods declines, which is the stuff to make more stuff later, an indicator of future economic growth.

Here are the goods import monthly changes, seasonally adjusted, with pharmaceutical imports increasing +$1.9 billion in a month.

• Industrial supplies and materials: -$1.42 billion
• Capital goods: -$2.1 billion
• Foods, feeds, and beverages: +$0.14 billion
• Automotive vehicles, parts, and engines: -$2.34 billion
• Consumer goods: +$2.32 billion
• Other goods: -$0.06 billion

On services, U.S. exports were unchanges while imports decreased -$0.2 billion for February. Running a trade deficit in advanced technology is not a good sign for those jobs of tomorrow.

Advanced technology products exports were $21.0 billion in February and imports were $26.9 billion, resulting in a deficit of $5.9 billion.

Here is the breakdown with major trading partners, not seasonally adjusted. China is the worst trade deficit, with $18.8 billion, yet last month was $23.3 billion, a $4.5 billion decrease from last month. OPEC, which is oil, also dropped half a billion in a month. March will be the start of the Japan disaster, so except unusual effects on the trade deficit due to Japan supply chains being disrupted.

The February figures show surpluses, in billions of dollars, with Hong Kong $2.5 ($2.2 for January), Australia $1.4 ($1.2), Singapore $0.8 ($0.8), and Egypt $0.5 ($0.5).

Deficits were recorded, in billions of dollars, with China $18.8 ($23.3), OPEC $9.4 ($9.9), European Union $6.9 ($5.6), Mexico $5.3 ($4.9), Japan $5.2 ($5.0), Germany $3.3 ($3.1), Canada $2.9 ($3.8), Ireland $2.6 ($1.9), Nigeria $2.5 ($2.9), Venezuela $2.1 ($2.8), Taiwan $0.9 ($0.9), and Korea $0.8 ($1.0).

Below is the raw customs basis accounting of the trade deficit with China, not seasonally adjusted. China alone is 40% of the goods trade deficit for February, odds a temporary decline due to their lunar holiday, where work grinds to a halt.

Below is a graph of trade deficit with China, per year. 2010 was a record for a trade deficit with China.

Here is January's report (unrevised, although graphs are updated). Here is the BEA website for additional U.S. trade data.

You might ask what are these Census Basis versus Balance of Payment mentioned all over the place? The above mentions various accounting methods so we're comparing Apples to Apples and not mixing the fruit. The trade report in particular is difficult due to the mixing of these two accounting methods and additionally some data is seasonally adjusted and others are not. One cannot compare values from different accounting methods and have that comparison be valid.

In a nutshell, the Balance of Payments accounting method is where they make a bunch of adjustments to not count imports and exports twice, the military moving stuff around or miss some additions such as freight charges. The Census basis is more plain raw data the U.S. customs people hand over which is just the stuff crosses the border. The 2005 chain weighted stuff means it was overall modified for a price increase/decrease adjustment in order to remove inflation and deflation time variance stuff.

Bottom line, you want just the raw data of what's coming into the country and going out, it's the Census basis and additionally the details are only reported in that accounting format.