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What Q2 GDP Rebound? Trade Deficit Soars To 2 Year High, To Slam Lofty Q2 GDP Expectations

Tyler Durden's picture




 

The US trade balance collapsed in April dashing hopes for the exuberant hockey-stock rebound in Q2 GDP. This is the biggest trade deficit since April 2012 and the biggest miss from expectations since October 2008. The last 2 months have seen the biggest slide in the deficit in a year as trade gaps with the European Union and South Korea reach records and the deficit with China surged by $7billion to $28 billion. Impots of capital goods, autos, and consumer goods all set records. And Q2 GDP downgrades in 3...2...1...

 

 

The details:

The U.S. monthly international trade deficit increased in April 2014 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $44.2 billion in March (revised) to $47.2 billion in April as exports decreased and imports increased. The previously published March deficit was $40.4 billion. The goods deficit increased $3.3 billion from March to $65.8 billion in April; the services surplus increased $0.2 billion from March to $18.6 billion in April.

A long-term chart of the trade deficit showing the dramatic, GDP -reducing, deterioration in recent months:

Exports

  • Exports of goods and services decreased $0.3 billion in April to $193.3 billion, reflecting a decrease in exports of goods. Exports of services increased.
  • The decrease in exports of goods mainly reflected decreases in capital goods and in foods, feeds, and beverages.
  • The increase in exports of services mainly reflected increases in financial services and in transport, which includes passenger fares.

Imports

  • Imports of goods and services increased $2.7 billion in April to $240.6 billion, mainly reflecting an increase in imports of goods. Imports of services also increased.
  • The increase in imports of goods mainly reflected increases in consumer goods, in automotive vehicles, parts, and engines, and in capital goods.
  • The increase in imports of services reflected increases of less than $0.1 billion in several categories of services.

Goods by geographic area (seasonally adjusted, Census basis)

  • The goods deficit with the European Union increased from $11.2 billion in March to $13.1 billion in April. Exports increased $0.3 billion to $23.2 billion, and imports increased $2.1 billion to $36.3 billion.
  • The goods deficit with China increased from $26.3 billion in March to $28.0 billion in April. Exports decreased $0.5 billion to $9.7 billion, and imports increased $1.2 billion to $37.7 billion.
  • The goods deficit with India increased from $2.0 billion in March to $2.6 billion in April. Exports decreased $0.3 billion to $1.4 billion, and imports increased $0.3 billion to $4.0 billion.
 

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Wed, 06/04/2014 - 08:41 | 4822616 buzzsaw99
buzzsaw99's picture

now that i believe

Wed, 06/04/2014 - 08:49 | 4822642 Pool Shark
Pool Shark's picture

 

 

And labor productivity drops the most on record:

http://www.forexfactory.com/#graph=52461

This should signal the beginning of the end for Corporate Profits...

 

Wed, 06/04/2014 - 09:31 | 4822826 codecode
codecode's picture

5 bad months in a row... long winter?

Wed, 06/04/2014 - 09:31 | 4822827 oklaboy
oklaboy's picture

and put in the reduced imports of oil due to greater production, and this becomes the worst eva....  

Wed, 06/04/2014 - 08:42 | 4822617 PlusTic
PlusTic's picture

where are all these fukknut economists now with their 5% GDP calls...in any normal world stocks are down 3% and rates -10Bps...but alas, not in this shithole run by filthy fukkin scum

Wed, 06/04/2014 - 08:49 | 4822627 GetZeeGold
GetZeeGold's picture

 

 

...where are all these fukknut economists now with their 5% GDP calls

 

I think they're working on carbon credits and really expensive energy policies.

Wed, 06/04/2014 - 08:50 | 4822657 BeerMe
BeerMe's picture

Can't wait for those energy trades.  They will jack up energy prices even more.  Too bad for Enron that they were so early to the party.

Wed, 06/04/2014 - 10:07 | 4823026 Shad_ow
Shad_ow's picture

They also working on the revision to these bad reports to "fix" the "mistakes."  The trend is up, get with the programme, don't become a doubter.  Can't have you "home grown terrorists" messing up the meme.

Wed, 06/04/2014 - 08:52 | 4822665 The Endless Pump
The Endless Pump's picture

In any "free" market stocks would be down 3%.  The US banking/stock markets are no more "free" than what is in a communist country.  How the fck does a federal reserve get to price almost all assets?!?!?

Wed, 06/04/2014 - 08:41 | 4822619 Tabarnaque
Tabarnaque's picture

Damn, then the Fed really is out of gold to export!

Wed, 06/04/2014 - 13:52 | 4823819 SDShack
SDShack's picture

Don't you just love the Fed and their Plan since the Great Recession started? Cut rates to 0, print money and monetize the debt to enable deficit spending to inject liquidity into the system to stimulate spending. The result has been an obliteration of their dual mandate. True unemployment is still 11% when you look at the labor participation rate, and inflation is off the chart for food, energy, rent, and HC. Meanwhile, all this stimulus has collapsed the dollar, which is driving inflation in commodities, but SHOULD make our EXPORTS increase. But no, now exports are decreasing because we don't export shit, except for either commodities, or high end products, both of which are becoming harder and harder for the masses to afford, and business to buy because of the ongoing world wide depression. We are officially in the Death Spiral. All due to the glorious Fed and their bought and paid for big businesses and politicians. Revolution really is the only way this can end.

Wed, 06/04/2014 - 08:42 | 4822620 Non Passaran
Non Passaran's picture

Excellent news!
Gold slightly up, at least until 8.30 EST.

Wed, 06/04/2014 - 08:43 | 4822625 papaswamp
papaswamp's picture

Ill be impressed if Q2 GDP makes it to 2.6%....

Wed, 06/04/2014 - 09:33 | 4822836 oklaboy
oklaboy's picture

+ or - ?

Wed, 06/04/2014 - 08:43 | 4822626 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

Let me order some more NFLX. 

Wed, 06/04/2014 - 08:44 | 4822628 Aknownymouse
Aknownymouse's picture

Quich. BTFDATH

Wed, 06/04/2014 - 08:44 | 4822632 B2u
B2u's picture

ISM needs to revise these numbers...

Wed, 06/04/2014 - 08:47 | 4822645 RealityCheque
RealityCheque's picture

But what about intellectual property? And hookers? And drug dealers? 

From within the ISM offices you can currently hear: "Quickly comrades! To the bullshit machine!!!"

Wed, 06/04/2014 - 08:49 | 4822647 SpanishInquisition
SpanishInquisition's picture

Just have Michael Mann calculate the Q2 GDP

Wed, 06/04/2014 - 08:49 | 4822649 autofixer
autofixer's picture

My son is obviously a genius, getting his Masters in Economics.  He'll never have to be correct or accountable.  Shear genius!

Wed, 06/04/2014 - 08:50 | 4822654 the not so migh...
the not so mighty maximiza's picture

revision by lunch as i bite into my ham sandwich

Wed, 06/04/2014 - 08:53 | 4822671 SheepDog-One
SheepDog-One's picture

Well, there's now plenty of time to pump up Q3 GDP expectations!

Wed, 06/04/2014 - 08:54 | 4822675 Everybodys All ...
Everybodys All American's picture

It might be time to rearrange the gdp calculations again.

Wed, 06/04/2014 - 08:55 | 4822679 Dr. Gonzo
Dr. Gonzo's picture

gonna have to sell more gold.

Wed, 06/04/2014 - 09:15 | 4822755 Quinvarius
Quinvarius's picture

That is probably our only export already. 

Wed, 06/04/2014 - 08:56 | 4822686 Unknown Poster
Unknown Poster's picture

More Eurodollars created, more Belgium treasury buying coming soon.

Wed, 06/04/2014 - 09:01 | 4822705 Notsobadwlad
Notsobadwlad's picture

Odd, given the reduction in oil imports over the last few years. But then again, maybe not if even our gooberment and military are dependent on overseas purchases.

Wed, 06/04/2014 - 09:05 | 4822719 ejmoosa
ejmoosa's picture

I've always said to vote with your dollars.

 

Looks like the rest of the world has woken up and voting with their dollars on so many of the failed actions of our illustrious leader, B.H. Obama.

 

What?  You don't want computers and routers with built in access points for the US?  

Wed, 06/04/2014 - 10:10 | 4823033 Shad_ow
Shad_ow's picture

"the rest of the world has woken up and voting with their dollars on so many of the working as planned actions of our illustrious leader, B.H. Obama."

Wed, 06/04/2014 - 09:08 | 4822728 curbyourrisk
curbyourrisk's picture

Just think how bad the REAL numbers must be!

Wed, 06/04/2014 - 09:22 | 4822778 orangegeek
orangegeek's picture

exactly!!

 

Barry and his band of communists are probably on line making threats to the publisher.

 

DO-OVER NOW OR ITS THE GULAG FOR YOU AND YOUR COMRADES

 

Wed, 06/04/2014 - 09:11 | 4822741 taketheredpill
taketheredpill's picture

 

 

I don't understand why Exports to EU are so low.  I've read lots of headlines that say Europe is fixed and turning the corner.

 

Bwah Ha Ha!

 

 

Wed, 06/04/2014 - 09:19 | 4822769 Dr. Engali
Dr. Engali's picture

I see that our wallstreet boys have found moar muppets for their weapons of financial mass destruction:

  • The increase in exports of services mainly reflected increases in financial services .
Wed, 06/04/2014 - 09:20 | 4822772 Eyeroller
Eyeroller's picture

As soon as the market goes down too much, there will be an announcement that a computer error happened and we will get REVISED (rerigged) numbers.

Wed, 06/04/2014 - 09:20 | 4822775 Smegley Wanxalot
Smegley Wanxalot's picture

But ... we are energy independent, right?  Net exporters ... bigger than the Saudis ... that's what I heard.

Wed, 06/04/2014 - 09:29 | 4822813 DR
DR's picture

DUH dejour:

 

Walmart's 'Made in USA' push exposes strains of manufacturing rebirth

 

"But suppliers trying to reshore production as part of the initiative by the world's largest retailer are running into practical problems as they try to restart long-idled corners of U.S. manufacturing.

 

Companies that make the leap have to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country's long industrial decline."

http://www.reuters.com/article/2014/06/04/us-walmart-reshoring-idUSKBN0E...

 

Wed, 06/04/2014 - 09:44 | 4822893 Chuck Knoblauch
Chuck Knoblauch's picture

How can anyone honestly call this a recovery?

There is no real domestic growth or demand, except the war business.

Ordinary people are not demaning more war.

They are demanding a restoration of purchasing power of the currency.

 

Wed, 06/04/2014 - 10:54 | 4823177 q99x2
q99x2's picture

Nobody is buying the stuff America isn't making.

Thu, 06/05/2014 - 03:37 | 4825927 katchum
katchum's picture

Zerohedge, you are not right here. The largest part of GDP is not the trade balance, it is consumption. When the trade deficit goes up, GDP goes up.

http://katchum.blogspot.com/2014/06/predicting-gdp-with-trade-deficit.html

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