The International Trade in Goods report shows a widening trade gap. Both exports and imports rose for the month but the gap widened more than any Bloomberg Econoday economist’s estimate.
Trade Gap Widens to -$63.3 Billion
Highlights
Exports of goods improved in June though imports rose even more, making for a $63.3 billion goods deficit in the month. The mix will pull down tomorrow’s second-quarter GDP report, where exports are a subtraction, but nevertheless is a welcome sign of strength in cross-border demand.
Exports rose 0.9 percent led by gains for foods and for consumer goods. Exports of capital goods, which have been weak, posted a solid monthly gain, also at 0.9 percent. The import side shows a big gain for industrial supplies where price inflation for oil is at play but also a 1.2 percent gain for capital goods imports and a second very strong gain for the leading component, consumer goods which rose 3.3 percent following May’s 2.7 percent. Gains in imports of consumer goods point to business confidence in consumer demand.
Advance Economic Indicators
Starting today, the Commerce Department will release an Monthly Advance Economic Indicators Report. In addition to the balance of trade, it also includes Advance Wholesale and Retail Inventories.
Advance International Trade in Goods
The international trade deficit was $63.3 billion in June, up $2.2 billion from $61.1 billion in May. Exports of goods for June were $120.2 billion, $1.1 billion more than May exports. Imports of goods for June were $183.5 billion, $3.3 billion more than May imports.
Advance Wholesale Inventories
Wholesale inventories for June, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $589.3 billion, virtually unchanged (±0.4 percent) from May 2016, and virtually unchanged (±1.6 percent) from June 2015. The April 2016 to May 2016 percent change was unrevised at up 0.1 percent (±0.2 percent).
Advance Retail InventoriesRetail inventories for June, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $604.2 billion, an increase of 0.5 percent (±0.2 percent) from May 2016, and were up 5.6 percent (±0.7 percent) from June 2015. The April 2016 to May 2016 percent change was unrevised at up 0.5 percent (±0.2 percent).
Mike “Mish” Shedlock
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My shopping experience says retail prices are up 30% year on year. Imports and exports reflect inflation, not an increase in goods. Central banks world wide have competitively debased their currencies. Worldwide inflation was bound to follow.
Deflation at hand … it will be China’s #1 export.
Consumers are broke dealing with flat / declining household income and crushing debt load.
Putting a stop on attempt at sustained inflation.
Atlanta FRB GDPNow weighs in
+2.3% —> +1.8%
https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1
I i think a massive default is at hand in the USA itself. All the indicators….Treasuries with record low yields, yen soaring in value against the dollar, silver soaring, oil plunging, etc etc all point to some type of financial “Event Horizon”…something that makes Detroit and Puerto Rico seem like a pittance.
Having been 100% long treasuries at one time during this recovery I’ve always found the incredibly low rates a true oddity. I was glad to get out of Treasuries when I did although ive missed a huge rally in them since…not as big as what ive made being in silver but still impressive gains nonetheless.
Treasury yields this low for this long is definitely a risk off trade in our current environment….meaning the Fed off the zero bound and still delivering “forward guidance.”