Economists are on a roll today. Not a single economist got 4th quarter GDP correct and not a single economist got the trade deficit correct. In both cases, economists were overly optimistic.

The Bloomberg Econoday consensus estimate for international trade was -66.0billion in a range of -68 billion to -64.8 billion. The report shows -69.2 billion.

The nation’s goods gap widened sharply in January, to $69.2 billion which is well beyond December’s revised $64.4 billion and outside Econoday’s low estimate. Imports of consumer goods and also vehicles are once again the source of the trade mismatch, surging 4.8 percent and 2.9 percent respectively and helping to lift total imports by 2.3 percent. Exports fell 0.3 percent with weakness in capital goods, down a very sharp 4.6 percent, the unwanted standout feature, one that may deepen in the months ahead based on yesterday’s durable goods report where related orders proved weak. This report will be bringing down early first-quarter GDP estimates.

Advance Reports 

advance-trade-2017-02-28

Trade in Goods by Category

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The above charts from Census Bureau Advance Report.

Consumer goods account for 26.6% of imports. In January, consumer goods imports rose 4.8%. Thus, consumer goods accounted for over half of the 2.3% increase in imports.

Exports look anemic, especially capital goods exports.

Also see GDP Unexpectedly Undershoots Consensus: What’s Ahead?

Mike “Mish” Shedlock