Today’s report on International Trade shows the US balance at $-58.4 billion. This is a better than the Econoday Consensus estimate of $-62.3 billion, and even a bit better than the most optimistic guess of $-59.2 billion.
The nation’s deficit in goods trade narrowed slightly to $58.4 million in August. Exports rose a solid 0.7 percent in the month reflecting strength in industrial supplies, vehicles, and also consumer goods. The gain in exports comes despite a 3.5 percent monthly fall back in food exports which surged 34 percent in July and made for a rare 3.0 percent jump in that month’s total exports. Imports also rose in the latest month, up 0.3 percent and reflecting a bounce back for capital goods as well as a gain in food. The gain in exports is welcome as is the gain in capital goods imports.
Balance of Trade
Balance of trade chart from Census Bureau.
Impact on GDP?
The impact on tomorrow’s Atlanta Fed GDPNow estimate and the FRBNY Nowcast estimate for 3rd quarter GDP is guesswork two ways.
First, I do not know what their model predicted. Second I do not know how their model will react even if I did know what it predicted.
Thus, this seemingly good result might not turn out that way if the models predicted even better results.
Nonetheless, I am willing to take a stab: The impact from this report will be small, but slightly positive on third quarter GDP estimates (+0.05 to +0.10) percentage points.
Mike “Mish” Shedlock