Trade data headlines show the trade balance significantly worsened from last month. Our analysis paints an improving picture for trade using the rolling averages – however imports grew much more than exports.
Analyst Opinion of Trade Data
Our monthly analysis using unadjusted data showed surprising growth in both exports and imports. But the data in this series wobbles and the 3-month rolling averages are the best way to look at this series. The 3-month averages are improving. The worsening of the trade balance does not bode well for 1Q2017 GDP.
Import goods growth has positive implications historically to the economy – and the seasonally adjusted goods and services imports were reported up month-over-month. Econintersect analysis shows unadjusted goods (not including services) growth accelerated 9.6 % month-over-month (unadjusted data) – up 12.0 % year-over-year (up 8.3 % year-over-year inflation adjusted). The rate of growth 3-month trend is improving (rate of change of growth is accelerating).
Exports of goods were reported up, and Econintersect analysis shows unadjusted goods exports growth acceleration of (not including services) 3.1 % month-over month – up 8.7 % year-over-year (up 6.4 % year-over-year inflation adjusted). The rate of growth 3 month trend is accelerating.
The improvement in seasonally adjusted (but not inflation adjusted) exports was attributed to industrial supplies. Import growth was due to consumer goods with some help from oil imports.
The market expected (from Bloomberg) a trade balance of $-49.4 B to $-45.0 B (consensus $48.5 billion deficit) and the seasonally adjusted headline deficit from US Census came in at $48.5 billion.
It should be noted that oil imports were up 20 million barrels from last month, and up 32 million barrels from one year ago.
The data in this series is noisy, and it is better to use the rolling averages to make sense of the data trends.
