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International Trade:  Steady With Small Declines in Imports & Exports

May 4, 2017

Bottom Line: The trade deficit held nearly steady in March. While likely to be heavily scrutinized going forward given the political rhetoric around trade policy, the most recent trade data confirms that trade made a modest positive contribution to GDP in the 1st Quarter. On a trend basis the trade deficit has been nearly unchanged for three years.

The International Trade Deficit NARROWED by $0.1 billion to $43.7 billion in March, compared with market expectations for an increase to a $44.5 billion deficit. For the first 3 months of the year, the trade deficit has averaged $45.2 billion, modestly above from the average of $42.1 billion for the same period in 2016.

Exports FELL by 0.9% to $191.0 billion after an increase of 0.1% in the prior month. The declines in industrial supplies and materials and motor vehicles and parts were partially offset by increases in capital goods and other goods. Export growth is now 7.0% ABOVE their year ago level.

Imports FELL by 0.7% to $234.7 billion after a decline of 1.8% in the prior month. The declines in capital goods and industrial supplies and materials were partially offset by increases in motor vehicles and parts. In March, oil imports increased. Oil imports' 2017 year-to-date levels are now moderately below the 2016 year-to-date levels. Imports are now 8.8% ABOVE their year ago level

Article by Contingent Macro Advisors