11 Jan 2016
US: Weak imports shrink trade deficit to US$42.374bn in November - ING
FXStreet (Delhi) – Rob Carnell Chief International Economist, notes that the November US trade deficit narrowed by a little over US$2bn to US$42.374bn, which will help lift the 4Q15 GDP figures by about 0.1/0.2% relative to what a flat reading would have delivered (assuming this is sustained).
Key Quotes
“But this is not quite as good a data post as first glance shows. The deficit was not materially affected by petroleum flows or prices, with the ex-petroleum deficit actually narrowing even more than the headline figure.”
“What appears to be dominating this result is a sharp (1.7% MoM) decline in imports, particularly on the goods side (service imports broadly unchanged). And this may reflect a much weaker level of underlying demand in the economy than some other recent data have suggested. Import weakness was also evident in the non-manufacturing ISM index released subsequently. Exports were a little softer too, but it is weak imports that dominated this result. This needs watching!”
Key Quotes
“But this is not quite as good a data post as first glance shows. The deficit was not materially affected by petroleum flows or prices, with the ex-petroleum deficit actually narrowing even more than the headline figure.”
“What appears to be dominating this result is a sharp (1.7% MoM) decline in imports, particularly on the goods side (service imports broadly unchanged). And this may reflect a much weaker level of underlying demand in the economy than some other recent data have suggested. Import weakness was also evident in the non-manufacturing ISM index released subsequently. Exports were a little softer too, but it is weak imports that dominated this result. This needs watching!”