| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | $-100.0B | $-94.3B | $-102.7B | $-102.8B |
| Imports - M/M | -1.6% | 2.3% | ||
| Exports - M/M | 2.4% | 0.0% |
Highlights
August was a surprisingly strong month for US goods exports and a a surprisingly weak month for US goods imports, making for a big 8.3 percent fall in the nation's goods deficit to $94.3 billion, down from $102.8 billion in July.
The Econoday consensus called for a $100.0 billion deficit for August. The much narrower deficit suggests a bigger boost for growth from the trade sector in the quarter. Note that the Atlanta Fed's GDPNow model now sees GDP growth at 3.1 percent, up from 2.9 percent previously, factoring in better net exports and better growth in domestic investment.
Goods exports surged by 2.4 percent in August from July and were up 4.1 percent compared to August last year. Imports dropped by 1.6 percent on the month and were up 6.9 percent from a year ago. On the export side, autos, consumer goods and other goods showed good gains. On the import side, autos and industrial goods were the bigger movers to the downside.
The Econoday consensus called for a $100.0 billion deficit for August. The much narrower deficit suggests a bigger boost for growth from the trade sector in the quarter. Note that the Atlanta Fed's GDPNow model now sees GDP growth at 3.1 percent, up from 2.9 percent previously, factoring in better net exports and better growth in domestic investment.
Goods exports surged by 2.4 percent in August from July and were up 4.1 percent compared to August last year. Imports dropped by 1.6 percent on the month and were up 6.9 percent from a year ago. On the export side, autos, consumer goods and other goods showed good gains. On the import side, autos and industrial goods were the bigger movers to the downside.
Market Consensus Before Announcement
The US goods deficit (Census basis) is expected to narrow by $2.8 billion to $100.0 billion in August after deepening by $6.4 billion in July to $102.8 billion.
Definition
This monthly report offers advance import and export data on the goods components of the monthly trade report. Goods make up roughly two-thirds of the nation's exports and roughly three-quarters of imports.
Note that data in the advance goods report are accounted for on a census basis and can differ slightly from subsequent data in the international trade report where goods data are accounted for on a balance of payment basis to adjust for changes in cross-border ownership.
Note that data in the advance goods report are accounted for on a census basis and can differ slightly from subsequent data in the international trade report where goods data are accounted for on a balance of payment basis to adjust for changes in cross-border ownership.
Description
Changes in the levels of imports and exports, along with the difference between the two (the trade balance), are valuable gauges of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the dollar in the foreign exchange market.
Imports indicate demand for foreign goods here in the United States. Exports show foreign demand for U.S. goods. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies.
Market reaction to this report is complex. Typically, the smaller the trade deficit, the more bullish it is for the dollar. Also, stronger exports are bullish for corporate earnings and the stock market. Like most economic indicators, the trade balance is subject to substantial monthly variability, especially when oil prices change.
It is also useful to examine the trend growth rates for exports and imports separately because they can deviate significantly. Trends in export activity reflect both the competitive position of American industry and the strength of domestic and foreign economic activity. U.S. exports will grow when: 1) U.S. product prices are lower than foreign product prices; 2) the value of the dollar is relatively weaker than that of foreign currencies; 3) foreign economies are growing rapidly.
Imports will increase when: 1) foreign product prices are lower than prices of domestically-produced goods; 2) the value of the dollar is stronger than that of other currencies; 3) domestic demand for goods and services is robust.
Imports indicate demand for foreign goods here in the United States. Exports show foreign demand for U.S. goods. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies.
Market reaction to this report is complex. Typically, the smaller the trade deficit, the more bullish it is for the dollar. Also, stronger exports are bullish for corporate earnings and the stock market. Like most economic indicators, the trade balance is subject to substantial monthly variability, especially when oil prices change.
It is also useful to examine the trend growth rates for exports and imports separately because they can deviate significantly. Trends in export activity reflect both the competitive position of American industry and the strength of domestic and foreign economic activity. U.S. exports will grow when: 1) U.S. product prices are lower than foreign product prices; 2) the value of the dollar is relatively weaker than that of foreign currencies; 3) foreign economies are growing rapidly.
Imports will increase when: 1) foreign product prices are lower than prices of domestically-produced goods; 2) the value of the dollar is stronger than that of other currencies; 3) domestic demand for goods and services is robust.
