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International Trade:  In-Line, Net Positive For 3Q GDP

October 5, 2017

Bottom Line: The trade deficit narrowed slightly in August with exports increasing as imports fell slightly. On a trend basis, the trade deficit has been slowly widening since 2013. The July/August average for real trade balance for goods is modestly below its Q2 levels, suggesting a positive contribution to the Q3 GDP.

The International Trade Deficit NARROWED by $1.2 billion to $42.4 billion in August, compared with market expectations for an increase to a $42.7 billion deficit. For the first 8 months of the year, the trade deficit has averaged $45.2 billion, modestly above from the average of $41.5 billion for the same period in 2016.

Exports ROSE by 0.4% to $195.3 billion after a decline of 0.2% in the prior month. The declines in and were more than offset by increases in and . Export growth is now 4.2% ABOVE their year ago level.

Imports FELL 0.1% to $237.7 billion after a decline of 0.2% in the prior month. The declines in industrial supplies and materials and capital goods were partially offset by increases in motor vehicles and parts and consumer goods. In August, oil imports increased. Oil imports 2017 year-to-date levels are now moderately below the 2016 year-to-date levels. Imports are now 4.0% ABOVE their year ago level.

Article by Contingent Macro Advisors