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?
- 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