September 2018 Trade Rolling Averages Improved

Trade data headlines show the trade balance worsened from last month – but the rolling averages for imports and exports improved.

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 improved for exports and improved for imports.

The trade balance worsened. Econintersect uses the trade balance as a factor in determining the acceleration or deceleration of the economy – but does not believe the negative trade balance per se is an economic issue.

Our analysis differs from the headline view in that BOTH imports and exports declined this month – but still, the rolling averages improved and growth continues to be in the range seen for the last year.

Note that the headline numbers are not inflation adjusted.

There continues to be little evidence of a trade war in the data.

Imports of goods were reported up – import goods growth has positive implications historically to the economy. Econintersect analysis shows unadjusted goods (not including services) growth decelerated 1.5 % month-over-month (unadjusted data) – up 8.8 % 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 up, and Econintersect analysis shows unadjusted goods exports growth deceleration of (not including services) 1.4 % month-over month – up 7.1 % year-over-year (up 4.4 % year-over-year inflation adjusted). The rate of growth 3 month trend is accelerating.

The growth in seasonally adjusted (but not inflation adjusted) exports was industrial supplies and capital goods. Import improvement was capital and consumer goods.

The market expected (from Econoday) a trade balance of $-58.4 B to $-51.0 B (consensus $53.4 B billion deficit) and the seasonally adjusted headline deficitfrom US Census came in at $54.0 billion.

It should be noted that oil imports were down 29 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.