Trade Deficit Surges, Hits $50.2 Billion, On Expectations Of $44.1 Billion, Major Downward Revisions To Q2 GDP Coming

Tyler Durden's picture

When we reported on the record surge in Chinese exports over the weekend we said that "the official read of the US trade deficit which will be reported on
Tuesday, will almost certainly spike, pushing GDP expectations lower yet
again." Sure enough, the US May trade deficit just exploded to $50.2 billion, far above the consensus of $44.1 billion, and much worse than April's revised $43.6 billion. Imports, not surprisingly, surged to an all time high $225.1 billion with exports lagging, even despite the relatively weak dollar in May, which declined modestly to $174.9 billion. From the report: "The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total May exports of $174.9 billion and imports of $225.1 billion resulted in a goods and services deficit of $50.2 billion, up from $43.6 billion in April, revised. May exports were $1.0 billion less than April exports of $175.8 billion. May imports were $5.6 billion more than April imports of $219.4 billion." Accoding to Bloomberg's Brusuelas, the key culprits were petroleum and industrial supplies. For those wondering what America exports and imports: "In May, the goods deficit increased $6.7 billion from April to $64.9 billion, and the services surplus increased $0.1 billion to $14.7 billion." So why do people care about the manufacturing CPI again? Bottom line: the bean counters will now be forced to revise their Q2 GDP forecasts well lower. And while Q2 is now a scratch, the problem is that this weakness is now continuing into Q3.


Full report here.

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Cassandra Syndrome's picture

And the Dow rallies...

101 years and counting's picture

the dow isnt rallying.  the EUR is rallying.  the dow is just hitching a ride.

Cognitive Dissonance's picture

At this point all markets foreign and domestic are just cheap whores willing to take anything in trade.

Oops, was that my out-loud voice?

Harlequin001's picture

It's a bit of a downer when the gold price is higher than the Baltic Dry...

Sudden Debt's picture


It must have been all Greek for them...

Cognitive Dissonance's picture

That's gonna hurt the cheerleaders and other assorted enablers. It's not the fall that kills you, but the sudden stop.


Global Hunter's picture

equity futures liked it.

trampstamp's picture

If you trade using fibs, it wouldn't have mattered. futures will hit 1317 this morning on ES... this is what happens after a pullback to the 6.18 almost to the tick ... then you'll see a bounce to the 3.82, which btw is around 1317. After that we'll have to see if they retest the highs or go lower. The futures are heavily traded using fibs regardless of news.

ElvisDog's picture

Question for you (semi-serious) - if Fibonaci trading is a reliable investment strategy, then why aren't you and the other Fibonaci traders richer than Warren Buffet?

It seems that just last week technical analysis completely failed. The S&P was below a key moving average. The technical traders were expecting a test of the moving average and then a sharp leg down. Except it didn't happen. The S&P punched back through the moving average to the upside. If you had traded expecting a sharp leg down based on technical analysis you lost your ass.

SheepDog-One's picture

Equity futures are full retard....never trade on full retard.

Archimedes's picture

I think that FX guy (John Taylor) might be on to something.."By Q1 2012 we are going to be in a recession damn it!

Harlequin001's picture

Hang on, we haven't finished with 2011 yet...

2012 is a Depression...

2013, outright fail.

Incubus's picture

how does this work?


failpression, bitchez


meh... /shrug

dumptakn's picture

I hear a big dump coming, honkies!

augie's picture

you mean bigger than a 3700 to 1 sell to buy ratio? Yikes, I should buy some more ammo. 

Silver Dreamer's picture

Is there ever a point when you have enough?

DosZap's picture

Unlessyou have somewhere to cache it, just purchase enough to have on hand for the roving mobs.

When the .gubs come for it,you won't need any, if you do, your dead.

Door#1, or #2, which comes first.

$64k money is on #2.

Rodent Freikorps's picture

Distributed caches. Just use a vacuum sealer and bury a few.

PVC pipe makes a good storage container also.

Just leave one easy to find cache.

ElvisDog's picture

How long do you plan on living in your survival bunker? If the Mad Max world you envision does come to pass, you wouldn't be able to leave it because someone with a hunting rifle would shoot you, right? Have you calculated how long your food, ammo, water would last? And what do you do about sanitation? Are you just going to poop in a garbage can? That sounds lovely. Or is your survival bunker hooked up to the sewer system? Have you figured the chances of you going insane living in paranoid isolation over long periods of time?

mayhem_korner's picture

RF is savvy enough not to answer your checklist of questions.  But for reference, check out some of the hard core types here...

Umbrellas are useful before it rains, ED.


Freddie's picture

Have you figured the chances of you going insane living in paranoid isolation over long periods of time?

Sure beats watching TV which is all brainwashing of the sheep by the elites.


Rodent Freikorps's picture

I have enough dead tree books to last a lifetime.

Add in hunting, fishing, planting and harvesting, and I really don't think I'll be all that bored.

snowball777's picture

Grab on with both's gonna be a growler!

BeerWhisperer's picture

Ouch... That's going to leave a mark.

slaughterer's picture

Futures declined mildy on bad trade deficit, and now are up siginficantly.    It must be the Berlusconi reassurances coming through at about the same time...

SheepDog-One's picture

Futures 'up significantly' at -14 after yesterday -180? Im not so impressed with the retard futures myself, what is it 2005 all over again?

hedgeless_horseman's picture

Winning the future(s).

GeneMarchbanks's picture

There's a theme emerging here. Now let's see how the rest of today goes. Is that the smell of a Treasury auction burning? Or is it ES?

lizzy36's picture

Recession is good for the market now....right?

I haven't been this bullish since April of 2008.

Rally on!!!!

Cognitive Dissonance's picture


The new worker monkey a la Linda Green. Where's Banzai7 when you need him?

I Got Worms's picture

^^Looks like a 2010 law school grad.

Cognitive Dissonance's picture

I wonder if he can pay back his student loans with three day old bread?

Just askin' 

MachoMan's picture

No, but he can go jack off at a nfp or government position and probably get them forgiven (on top of a mediocre salary, but probably no less than he would otherwise get starting out at a private firm)... of course, if he can't pay, then he can probably get a forebearance...  and by the time he gets a job that will allow him to repay them, the market will have cleared and there will be no reason for the government to hold his feet to the fire (since it won't be around in the same form and shape and will probably have a new outlook on the world).


Cognitive Dissonance's picture

Are you jealous or angry?

Or both?

MachoMan's picture

I'm not angry with those who utilize the system to their pecuniary advantage...  I'm angry with those who change and grow the system to their pecuniary advantage...  and, no, I'm not jealous...  I'll take my position over needing a forebearance or having to waste my time at an nfp or government employer any day.  If my situation was different, I'd hit them up for a job, just the same...  but, thankfully, it's not.

Sudden Debt's picture

What was the GDP of the US again?

It must be hard these day to calculate a new debt ceiling compaired to GDP these days...


jerry_theking_lawler's picture

ah ha SD,


therein lies the rub.....the US GDP number.

its all been a lie and all of the debt has been built on this number. therefore, from deductive reasoning, all the debt has been built on a lie.

the GDP calc is/has always been one of the main problems.

Bohemian Clubber's picture

Everything is safe again now, don't worry sweetheart you can get back in the water

Dick Darlington's picture

And surprise surprise, equities go nuts. Recessions are bullish! What a joke...

Cassandra Syndrome's picture

Anytime now when apocalyptic movies are on such as "Deep Impact", "Armageddon", "28 Days Later", "Mad Max", "Knowing" etc, I sit there watching them thinking, I bet you the Dow was still rallying in those scenarios...

doomandbloom's picture

smooth transition of power from US to China...

relax...or try to

BeerWhisperer's picture


It's the end of the world as we know it. It's the end of the world as we know it. And I feel fine.......

Bartanist's picture

US and Western product companies are in a death spiral. Because of bank and government overhead (and to a lesser extent labor costs) they can no longer afford to manufacture in the US and they can no longer commit infrastructure building assets in the Western World.

Western companies have become renters of manufacturing instead of owners... The Chinese and other Asian companies are the landlords and simply rent manufacturing (and we will see more and more R&D, financing and Engineering rented as well) just as poor people who cannot afford a down payment on a house rent from a landlord, who accumulates the profit as well as builds equity.

As the situation continues and Western companies borrow more and more to support the drain of money to elitist executives and to China/Asia the Western/US companies will slide down the slope of becoming hollow shells until one day people wake up and discover that they are better off buying from the source directly and forgetting about Intel, Apple, GM, GE and other companies that sold out the US first by choice for greed and then as a means to maintain executive (banker and politician) lifestyle at the expense of everyone else.

Swirley anyone?

WoodMizer's picture

The arguement of late seems to be between those who predict financial armageddon in the near-term, and those who see it coming in the mid-term.

I am new to the site and I don't want to seem jaded, but older threads have predicted the collapse before.

With complete sincerity and interest, I would like to ask the ZH community what the odds are of collapse by October 1st?

Collapse defined as 70% to 80% loss on equities.

SheepDog-One's picture

The 'collapse' already happened a few years ago, just been papered over with trillions printed out of thin air while illusionists keep up their daily act.

WoodMizer's picture

Follow up question:

Do you think the surge in oil prices caused the collapse of 2008, or was it a sign of fractional banking leverage?

Put more simply was peak oil the tipping point?