• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Q1 GDP To Tumble As Trade Deficit Surges Most Since September

Tyler Durden's picture


So much for those already abysmally low Q1 GDP forecasts. Moments ago, the Census Bureau released trade data for February which crushed expectations of an improvement from $39.1 billion (revised to $39.3 billion) to $38.5 billion, and instead rose 7.7% to $42.3 billion, the highest monthly trade deficit since September. This was driven by a 0.4% increase in imports to to $231.7 billion offset by a drop in exports of 1.1%  to $192.5 billion. The goods deficit increased $2.2 billion from January to $61.7 billion in February; the services surplus decreased $0.8 billion from January to $19.4 billion in February.

The breakdown of imports and exports:

Exports of goods and services decreased $2.0 billion in February to $190.4 billion, reflecting a decrease in exports of goods. Exports of services were nearly unchanged.

  • The decrease in exports of goods mostly reflected decreases in industrial supplies and materials and in capital goods that were partly offset by increases in consumer goods and in other goods.
  • Exports of services were nearly unchanged. Increases in other private services, which includes items such as business, professional, and technical services, insurance services, and financial services, and in royalties and license fees were mostly offset by a decrease in passenger fares.

Imports of goods and services increased $1.0 billion in February to $232.7 billion, mostly reflecting an increase in imports of services. Imports of goods also increased.

  • The increase in imports of services was mainly accounted for by an increase in royalties and license fees, which included payments for the rights to broadcast the 2014 Winter Olympic Games.
  • The increase in imports of goods mostly reflected an increase in automotive vehicles, parts, and engines. Capital goods decreased.

Perhaps all those impressed by America's energy independence will be curious to know that the trade deficit excluding petroleum imports was $22.4 billion, in other quite a bit in total energy imports despite the shale boom, which according to some has peaked already. Some other energy trade related data:

  • Feb. non-crude petroleum imports narrowed to $5.7b from $5.9b m/m; 22.8% of total petroleum imports
  • Crude oil imports averaged 7.590M b/d in Feb. compared to 8.275M b/d in Jan.
  • Oil imports from OPEC rose to 45.6% of the total
  • Oil imported from Canada and Mexico was 46.2% of total in Feb. vs 46.9% in Jan.
  • Petroleum deficit in real dollars at $11.9b in Feb.
  • Petroleum exports fell in real dollars to $6,312b in Feb. after $7,151b in Jan

Finally, and most amusingly, in the breakdown of trade with regional partners, we find this pearl:

  • The goods deficit with China decreased from $27.8 billion in January to $20.9 billion in February. Exports decreased $0.5 billion to $9.9 billion, and imports decreased $7.5 billion to $30.7 billion

So net deficit with China tumbled... at precisely the same time China reported its net surplus with the US soared! With so much data manipulation is it any wonder thee lies are just so glaring now?

Most notably however, is that as a result of this "unexpected" surge in the deficit, the Q1 GDP forecast cuts, anywhere between 0.2% and 0.4% are set to begin. To wit:

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Thu, 04/03/2014 - 09:09 | 4620779 Seasmoke
Seasmoke's picture


Thu, 04/03/2014 - 09:12 | 4620788 Sudden Debt
Sudden Debt's picture

you sound like my wife before sex day...

Thu, 04/03/2014 - 09:26 | 4620836 ElvisDog
ElvisDog's picture

Clearly you have been married for quite a while. I look forward to sex day - it's one of the highlights of my week...

ElvisDog: (reaches over and touches Mrs ElvisDog's thigh)

Mrs ElvisDog: "You've got 5 minutes"

ElvisDog: "No problem, I can be done in 5"

Thu, 04/03/2014 - 09:28 | 4620845 NotApplicable
NotApplicable's picture

If only dollars had value...

...they export plenty of them.

Thu, 04/03/2014 - 09:30 | 4620860 Chupacabra-322
Chupacabra-322's picture

@ NotApplicable,

We the people, should stop using the USD.

It is nothing more than a receipt for a Treasury Bond.

We have to pay a percentage to the PRIVATE BANK (The federal reserve) for the "privilege" to use the receipts.


the nation can issue a dollar bond, it can also issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference, between the bond and the bill, is that the bond lets the money-broker collect twice the amount of the bond, and an additional 20%. Whereas the currency, the honest sort, provided by the Constitution, pays nobody, but those, who contribute in some useful way. It is absurd, to say that our country can issue bonds, and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the people.”
– Thomas Edison

Thu, 04/03/2014 - 09:31 | 4620866 Headbanger
Headbanger's picture

SD that's the best post of the week!

Thu, 04/03/2014 - 09:21 | 4620818 LawsofPhysics
LawsofPhysics's picture

more acurrately and more to the point, American, the land of the takers and not makers.


Good thing the rest of the world hasn't woken up to this yet, oh wait...

Thu, 04/03/2014 - 09:26 | 4620835 Sudden Debt
Sudden Debt's picture

From the Halls of Google
To the Shores of Miami;
We will fight our country's battles
In the air with drones, on land by DHS and the Fukushima radiated sea;
First flight from right and freedom
And to keep our pants clean;
We are proud to claim the title
Of United States maroons!

Thu, 04/03/2014 - 09:20 | 4620819 Serfs Up
Serfs Up's picture

Ummm......buy stawks?

Thu, 04/03/2014 - 09:18 | 4620781 Sudden Debt
Sudden Debt's picture


Thu, 04/03/2014 - 09:25 | 4620831 Ignatius
Ignatius's picture

It's not important whether they're exporting nor importing weed, only that it moves at a profit.

Thu, 04/03/2014 - 09:11 | 4620784 PlusTic
PlusTic's picture

Biggest mass delusion in history...someone please start picking-off FED officials

Thu, 04/03/2014 - 09:18 | 4620814 Cursive
Cursive's picture


Yes, mass delusion.  Afterall, we are at all-time highs for equities and this abysmal GDP data will be seen to have no effect a positive effect on corporate earnings.  Futures in the green as I type....

Thu, 04/03/2014 - 09:21 | 4620822 ElvisDog
ElvisDog's picture

I love the "corporate earnings" canard. Don't you mean "corporate earnings per share driven higher by stock buybacks"? What are the rate of increase of corporate revenues and free cash flow (or earnings minus new debt) doing these days?

Thu, 04/03/2014 - 09:29 | 4620854 vote_libertaria...
vote_libertarian_party's picture

uhhhh...I believe that is 'adjusted' earnings are at all time highs

Thu, 04/03/2014 - 09:11 | 4620785 SlipStitchPass
SlipStitchPass's picture

Bullish! Period.

Thu, 04/03/2014 - 09:14 | 4620794 machineh
machineh's picture

Nothing like printing a few trillion to take the edge off PMS.

Let's buy some shoes!

Thu, 04/03/2014 - 09:13 | 4620790 SheepDog-One
SheepDog-One's picture

Huh....let's try some more Russian money transfer halts?

Thu, 04/03/2014 - 09:13 | 4620792 Sudden Debt
Sudden Debt's picture


or would that be manipulation?

Thu, 04/03/2014 - 09:14 | 4620795 El Hosel
El Hosel's picture

.... Lets see, Bullard mentions un-taper, Yellen Doves over her "6 months" gaff, ECB sits and spins.  MOAR MOAR MOAR

Thu, 04/03/2014 - 09:15 | 4620796 MFLTucson
MFLTucson's picture

The media is to blame for intentionally mileading the people and never questioning the TRIBE!

Thu, 04/03/2014 - 09:16 | 4620805 Sudden Debt
Sudden Debt's picture

yeah... the media is always so negative... BURN THEM!!

Thu, 04/03/2014 - 12:57 | 4621553 Rafferty
Rafferty's picture

Easier said than done, given human nature.  Anyone in the media who questions the tribe will get Helen Thomased.  Would you if you were in the MSM?

Thu, 04/03/2014 - 09:16 | 4620803 Smegley Wanxalot
Smegley Wanxalot's picture

The manipulation is not glaring, because we gotz us uh iPhone anna EBT.

Thu, 04/03/2014 - 09:16 | 4620804 Ignatius
Ignatius's picture

"So net deficit with China tumbled... at precisely the same time China reported its net surplus with the US soared! With so much data manipulation is it any wonder thee lies are just so glaring now?"

Somebody's lying... or nobody really knows.

This really highlights the importance of perception and propaganda from a leadership perspective.

Thu, 04/03/2014 - 09:19 | 4620817 Smegley Wanxalot
Smegley Wanxalot's picture

Somebody???  Everybody's lying, man. Everysinglefuckingbody in government, everywhere.

Thu, 04/03/2014 - 09:22 | 4620823 Ignatius
Ignatius's picture

I would never lie to you.

Thu, 04/03/2014 - 09:34 | 4620877 Chupacabra-322
Chupacabra-322's picture

Nothing changes the method of operation has always been PsyOp, False Narratives, Dis/ Misinfo & Propaganda.

Thu, 04/03/2014 - 09:16 | 4620806 Cattender
Cattender's picture

yes america.. it IS a Recovery!!!!!! (BUY STOCK NOW!!!!)

Thu, 04/03/2014 - 09:18 | 4620811 PlusTic
PlusTic's picture

Just keep flattenig the yield curve and ripping stocks on each new piece of bad macro news...you FED fukks need to be eradicated with extreme prejudice

Thu, 04/03/2014 - 09:24 | 4620828 DavidC
DavidC's picture

And the pre-market's going UP!?


Thu, 04/03/2014 - 09:27 | 4620841 buzzsaw99
buzzsaw99's picture

first to say it? bullish!

Thu, 04/03/2014 - 09:32 | 4620872 Jim B
Jim B's picture

Yes, very bullish, I just placed a large order of computer equipment for a customer.  All of it manufactured and assembled in China.  The elite fraud of a viable service economy is nothing but a fraud!  


Thu, 04/03/2014 - 09:28 | 4620849 Squid Viscous
Squid Viscous's picture

must be why the ES just bounced 5 points 

Thu, 04/03/2014 - 09:38 | 4620888 El Hosel
El Hosel's picture

.... Pull the plug on the Federal trading desk and the ES is down 50 instantly..or faster

Thu, 04/03/2014 - 09:36 | 4620880 TrustWho
TrustWho's picture

Another all time high today? I wonder how high the S&P will be when nominal GDP = $0.00

Thu, 04/03/2014 - 09:39 | 4620891 yogibear
yogibear's picture

It's ok, Yellen and the people at the fed like printing billions in paper to hand to the Chinese  goods. Same for petro products in the middle east.


Thu, 04/03/2014 - 09:43 | 4620904 AynRandFan
AynRandFan's picture

Lavorgna makes a 35% correction in his latest forecast. In what reality are such large errors acceptable? "Sorry, boss, I missed the target by a third." "You're fired."

Thu, 04/03/2014 - 09:44 | 4620908 bdub2
bdub2's picture

out with the Q1 polar vortex meme, in with Q2 Earthquake/Tsunami free pass. 

Thu, 04/03/2014 - 09:48 | 4620921 STG5IVE
STG5IVE's picture

Obama is doing a fine job bringing manufacturing back to America

  • Manufacturing debt
  • Manufacturing poverty
  • Manufacturing despair
  • Manufacturing...
Thu, 04/03/2014 - 10:02 | 4620948 Save_America1st
Save_America1st's picture

piece 'o cake.  Just go back and revise the old GDP numbers all the way back from 1913 to present.  Add a bunch of good shit...redact a bunch of bad shit.  Shift some numbers here and there...ya know, just like they calculate inflation.  And whoalla!!! 

Best damn GDP ever, bitchez!!!

Then just keep repeating that you're "Winning!!!" and deny all manipuflation and that anyone who disagrees are just uneducated, redneck, racists and you're good to go.

Isn't that how a successful economy works?


Thu, 04/03/2014 - 10:52 | 4621142 belogical
belogical's picture

If you have to adjust your estimates in one direction more then 75% of the time, perhaps you should stop estimating 

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