November 2017 Trade Balance Marginally Worsened

Trade data headlines show the trade balance marginally worsened from last month.

Analyst Opinion of Trade Data

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 increasing for exports and increasing for imports…

The data is much worse if one considers inflation is grabbing hold in exports and imports – and the headline numbers are not inflation adjusted.

Import goods growth has positive implications historically to the economy – and the seasonally adjusted goods and services imports were reported marginally up month-over-month. Econintersect analysis shows unadjusted goods (not including services) growth decelerated 1.4 % month-over-month (unadjusted data) – up 8.5 % year-over-year (up 5.3 % year-over-year inflation adjusted). The rate of growth 3-month trend is accelerating (rate of change of growth is accelerating).

Exports of goods were reported marginally up, and Econintersect analysis shows unadjusted goods exports growth acceleration of (not including services) 4.0 % month-over-month – up 9.5 % year-over-year (up 6.3 % year-over-year inflation adjusted). The rate of growth 3-month trend is accelerating.

The marginal improvement in seasonally adjusted (but not inflation adjusted) exports was widespread but reinforced by civilian aircraft and automotive. Import improvement was also widespread.

The market expected (from Bloomberg) a trade balance of $-50.4 B to $-46.0 B (consensus $-48.3 B billion deficit) and the seasonally adjusted headline deficit from US Census came in at $50.5 billion.

It should be noted that oil imports were up 0.9 million barrels from last month, and up 3 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: