This morning the The U.S. Census Bureau announced “Advance Numbers” for international trade, wholesale inventories, and retail inventories for September 2016.
The key line item is a decline in imports and a rise in exports. This will likely, but not necessarily, boost 3rd quarter GDP estimates.
Advance Trade and Inventory Numbers
Advance International Trade
Advance International Trade Details
Gaming the GDP Effect
Given that exports add to GDP and imports subtract from GDP, this report will undoubtedly add to GDP, subject to future revisions of course.
Gaming the Effect on GDP Model Estimates
Whether or not these numbers add to GDPNow and Nowcast models is uncertain. It all depends on how the numbers came in vs. what the models predicted.
I will take a stab that the advance trade report will add 0.1 to 0.2 percentage points to the 3rd quarter GDP estimates for both GDPNow and the FRBNY Nowcast.
New Home Sales
Earlier today I took a look at the impact of today’s new home sales report on GDP model estimates.
Because of huge backward revisions, I am reasonably confident new home sales will subtract from GDP estimates. My estimate is 0.3 percentage points in a range of 0.2 to 0.4 percentage points. Deeper negative would not be surprising, but I estimated -0.3 percentage points to pick a number.
Food for Thought
Today’s reports may very well offset each other. Nonetheless, some trade numbers provide food for thought.
- Despite a rising dollar, consumer goods exports are up 4.4%.
- Despite a falling dollar, consumer goods imports are down 1.8% but auto imports are up 4.3%.
Given that auto sales are on a slide, why are auto imports up big? And what does a decline in consumer goods exports suggest about Christmas season sales?
Note that food exports are down 12.8%. Does anyone recall the WSJ article that speculated soybean exports would cause a huge jump in third quarter GDP?
Related Articles
- September New Home Sales Lower than Consensus, July and August Revised Sharply Lower
- 3rd Quarter GDP at 4% Thanks to Soybeans?
- PMI Services Activity Jumps; Markit Estimates 2.0% GDP for 4th Quarter
Mike “Mish” Shedlock
“… subject to future revisions of course”. The footnotes become the main focus these days.
The US dollar was pretty much the same month-over-month and year-over-year, so currency fluctuations may be disregarded in the comparisons. I like to use the not seasonally adjusted number because that’s what companies use to pay the bills.
I will put my prediction out there- when the last quarter GDP is announced it will be 4+% SAAR. Also, when the BLS releases the unemployment rate next week, it will be back under 5% with 400,000 jobs created. My theory- if you are going to lie, make a big fat whopping one.
Yancy–lie early , lie often, and lie consistently.
we cannot rely on company audited financials, we cannot rely on govt data and for certain we cannot rely on what comes out of the mouths of elected “leaders” (anybody saying the economy is in decline is peddling fiction or the deficit is 597 billion when debt going up 1.4 trillion, or this will not cost you one thin dime, or my foundation pays out a world class 90%, of in my husbands adm there was a 300 billion surplus, or Hussein has WMD).
Its apparently inate to politicians. Bankers, used car salespeople and lawyers-oops, just lawyers who are also politicians–thats what we get for having so many lawyers turned politicians: Bill and Hillary, Barack and Michele, I’ll stop there. Its so bad that Bush the second is beginning to look good.