Here Come The Q4 GDP Downward Revisions As December Exports Tumble, Trade Deficit Balloons

Tyler Durden's picture

Update: that didn't take long - Barclays Cuts 4Q Tracking GDP to 2.8% From 3.2%

Here come the downward revisions to the "strong" initial Q4 GDP print. Moments ago the December trade deficit was released, and it soared from the impressive November deficit print of $34.6 billion to a far less impressive $38.7 billion, far above the $36.0 billion expected, and an indication that, as we warned, the Q4 GDP revisions are imminent (unless of course inventory numbers rise even more to offset the weakness). As the BEA simply explains, "The deficit increased... as exports decreased and imports increased." Indeed.

Breaking it down:

Exports

Exports of goods and services decreased $3.5 billion in December to $191.3 billion, reflecting a decrease in exports of goods. Exports of services increased.

  • The decrease in exports of goods reflected decreases in industrial supplies and materials, in capital goods, in other goods, in automotive vehicles, parts, and engines, and in consumer goods.
  • The increase in exports of services reflected increases in travel, in passenger fares, and in other transportation, which includes freight and port services.

Imports

Imports of goods and services increased $0.6 billion in December to $230.0 billion, reflecting increases in imports of both goods and services.

  • The increase in imports of goods reflected increases in consumer goods, in industrial supplies and materials, and in other goods that were partly offset by decreases in automotive vehicles, parts, and engines, and in capital goods.
  • The increase in imports of services reflected increases in travel and in passenger fares that were partly offset by a decrease in other transportation.

Trade broken down by grographic area:

  • The goods deficit with the European Union increased from $10.1 billion in November to $11.3 billion in December. Exports decreased $2.0 billion to $20.9 billion, and imports decreased $0.8 billion to $32.2 billion.
  • The goods deficit with China decreased from $26.9 billion in November to $24.5 billion in December. Exports decreased $0.1 billion to $13.1 billion, and imports decreased $2.6 billion to $37.6 billion.
  • The goods deficit with Canada increased from $1.5 billion in November to $3.4 billion in December. Exports decreased $2.4 billion to $23.3 billion, and imports decreased $0.5 billion to $26.7 billion

However, the biggest story by far is the December collapse in exports, with the following key categories impacted the most: Industrial Supplies: -2.9%, Capital Goods -2.4%, Automotive Vehicles -5.9%, Consumer Goods down 4.4%, and Other Goods: -16.1%.

So did the snow prevent the US from exporting in December too?