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.