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International Trade:  In-Line With Expectations

November 3, 2017

Bottom Line: The trade deficit widened modestly in September with both exports and imports increasing modestly. Net exports made a modest positive contribution to the advance 2017 Q3 GDP growth estimate; the Q3 average for real trade balance for goods suggests there should be limited changes to this GDP component as revisions are released. On a trend basis, the trade deficit has been widening since 2013.

The International Trade Deficit WIDENED by $0.7 billion to $43.5 billion in September, compared with market expectations for an decline to a $43.2 billion deficit.

For the first 9 months of the year, the trade deficit has averaged $45.0 billion, modestly above from the average of $41.2 billion for the same period in 2016.

Exports ROSE by 1.1% to $196.8 billion after an increase of 0.1% in the prior month. The declines in consumer goods and capital goods were more than offset by increases in industrial supplies and materials and other goods. Export growth is now 4.6% ABOVE their year ago level.

Imports ROSE 1.2% to $240.3 billion after a decline of 0.2% in the prior month. The declines in motor vehicles and parts and other goods were more than offset by increases in capital goods and industrial supplies and materials. In September, oil imports decreased. Oil imports 2017 year-to-date levels are now moderately below the 2016 year-to-date levels. Imports are now 6.1% ABOVE their year ago level.

Article by Contingent Macro Advisors