• 1 hour Airbnb In Acquisition Mode Ahead Of IPO
  • 4 hours Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 6 hours Champagne Sales Slow As European Economic Worries Grow Louder
  • 22 hours Putin Signs “Digital Iron Curtain” Into Law
  • 1 day Russian Metals Magnate Sues U.S. Over Sanctions
  • 1 day Tesla Looks To Jump Into Indian Market
  • 1 day Global Banks Lay Groundwork To Re-Inflate Asset Prices
  • 2 days Homeowners Experiment With Risky New Investment Trend
  • 2 days U.S. Tech Stocks Look Increasingly Vulnerable
  • 2 days De Beers To Expand World’s Most Profitable Diamond Mine
  • 2 days Ford CEO Gets Raise After Massive Layoff Round
  • 3 days Germany’s Flirtation With Recession Could Cripple The Global Economy
  • 3 days Where To Look As Gold Miners Inch Higher
  • 4 days Google Faces Billions In Fines From European Regulators
  • 4 days The Energy Industry Has A Millennial Problem
  • 5 days Russian Banks Scramble For Sanction Loopholes
  • 5 days Gold ETFs Take A Hit After Four-Month Run
  • 6 days European Union Takes Aim At Ten New Tax Havens
  • 6 days Goldman Defends Trillion-Dollar Corporate Buyback Spree
  • 6 days $600 Billion At Risk As Boeing Fallout Continues
The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

  1. Home
  2. Markets
  3. Other

Trade Deficit Widens, Exports Decline 1.8%, Imports Rise 1.3%: Two Piece Puzzle

The Census Bureau report on International Trade shows a widening trade deficit.

Exports decline 1.8%. Imports rise 1.3%.

US International Trade

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $42.6 billion in October, up $6.4 billion from $36.2 billion in September, revised. October exports were $186.4 billion, $3.4 billion less than September exports. October imports were $229.0 billion, $3.0 billion more than September imports.

The October increase in the goods and services deficit reflected an increase in the goods deficit of $6.3 billion to $63.4 billion and a decrease in the services surplus of $0.1 billion to $20.8 billion.

Year-to-date, the goods and services deficit decreased $8.8 billion, or 2.1 percent, from the same period in 2015. Exports decreased $58.7 billion or 3.1 percent. Imports decreased $67.5 billion or 2.9 percent.


How Will This Affect GDP Estimates?

The answer is "not at all". That may seem surprising because imports subtract from GDP while exports add.

The reason this will not affect estimates much is the report was in-line with the advance report and the numbers were pretty much known.


Economist Panel Almost Gets Number Right

The panel of Bloomberg Econoday economists got the number almost correct.

The Econoday consensus estimate was a deficit of $42.0 billion vs. an actual deficit of $42.6 billion.

The moral of this story is that if you tell a group of economists the correct number in advance, the consensus may come close. That said, at least one economist was way off, estimating a deficit of only $39.0 billion.

I suspect he or she was not in class they day they passed out the the answers to the upcoming test.


Two Piece Puzzle

I presented the advance report on November 25 in Trade Deficit Widens 9.6% as Exports Dip, Food Exports Decline 11.8%.

That report shows a deficit of $62.0 billion, but that number just reflects "goods". Today’s report covered goods and services.  Those studying the pre-test material only got the biggest piece of the two-piece puzzle, not the entire puzzle.

Mish Tweet

Meanwhile, the strengthening US dollar is going to increasingly come into play, dampening exports.

 

Back to homepage

Leave a comment

Leave a comment