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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Seasmoke's picture

DEPRESSION. PERIOD. 

Sudden Debt's picture

you sound like my wife before sex day...

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"

NotApplicable's picture

If only dollars had value...

...they export plenty of them.

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.

THIS IS WHY WE HAVE DEBT !!!!!!

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

Headbanger's picture

SD that's the best post of the week!

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...

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!

Sudden Debt's picture

OBAMA SAYS: LET'S BECOME A GLOBAL WEED EXPORTER, NOT JUST A IMPORTER!!

Ignatius's picture

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

PlusTic's picture

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

Cursive's picture

@PlusTic

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....

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?

vote_libertarian_party's picture

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

machineh's picture

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

Let's buy some shoes!

SheepDog-One's picture

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

Sudden Debt's picture

WHY DON'T THEY INVENT SOME HIGH FREQUENCY TRADING IN REAL TRADE OF GOODS????

or would that be manipulation?

El Hosel's picture

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

MFLTucson's picture

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

Sudden Debt's picture

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

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?

Smegley Wanxalot's picture

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

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.

Smegley Wanxalot's picture

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

Chupacabra-322's picture

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

Cattender's picture

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

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

DavidC's picture

And the pre-market's going UP!?

DavidC

buzzsaw99's picture

first to say it? bullish!

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!  

 

Squid Viscous's picture

must be why the ES just bounced 5 points 

El Hosel's picture

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

TrustWho's picture

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

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.

 

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."

bdub2's picture

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

STG5IVE's picture

Obama is doing a fine job bringing manufacturing back to America

  • Manufacturing debt
  • Manufacturing poverty
  • Manufacturing despair
  • Manufacturing...
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?

 

belogical's picture

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