A quick recap to the trade data released today paints a mixed picture. The unadjusted three month rolling average value of imports and exports decelerated month-over-month,. Many care about the trade balance (which decreased marginally relative to last month), but trade balance simply has little correlation to economic activity. Note that inflation adjusted data paints a prettier picture economically as there is deflation in this sector.
Import goods growth has positive implications historically to the economy – and the seasonally adjusted goods and services imports were reported down month-over-month. Econintersect analysis shows unadjusted goods (not including services) growth deceleration of 4.8% month-over-month (unadjusted data). The rate of growth 3 month trend is decelerating.
Exports of goods were reported marginally up, but Econintersect analysis shows unadjusted goods exports growth deceleration of (not including services) 1.6 % month-over month. The rate of growth 3 month trend is decelerating.
Inflation Adjusted But Not Seasonally Adjusted Year-over-Year 3 Month Rolling Average – Goods Export (blue line) and Goods Import Excluding Oil (red line)
The marginal increase in seasonally adjusted exports was generally across the board. Import decrease was due to consumer goods (but the cause was deflation – not the quantity of imports).
The market expected (from Bloomberg) a trade deficit of $-45.0 B to $-39.3 billion (consensus $42.9 billion deficit) and the seasonally adjusted headlinedeficit from US Census came in at a deficit of $41.9 billion.
It should be noted that oil imports were up 13 million barrels from last month, and down 2 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.
The headline data is seasonally but not inflation adjusted. Econintersect analysis is based on the unadjusted data, removes services (as little historical information exists to correlate the data to economic activity), and inflation adjusts. Further, there is some question whether this services portion of export/import data is valid in real time because of data gathering concerns. Backing out services from import and exports shows graphically as follows:
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