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US Trade Deficit Soars To Worst Since Financial Crisis; Will Push Q1 GDP Negative

Tyler Durden's picture




 

After shrinking notably in Feb, March's US Trade deficit exploded. Against expectations of a $41.7bn deficit, the US generated a $51.4bn deficit - the worst since Oct 2008 and the biggest miss on record. Exports rose just $1.6bn while imports soared $17.1bn with the goods deficit with China soaring from $27.3bn to $37.8bn in March.

Ironically, just as the "harsh winter" was found to lead to a GDP boost due to a surge in utility spending, so the West Coast port strike which was blamed for the GDP drop, was actually benefiting the US economy as it lead to a plunge in imports. In March, however, the pipeline was cleared, and US imports from China soared by over $10 billion to $38 billion.  End result: prepare for upcoming Q1 GDP downgrades into negative territory, which with a Q2 GDP of 0.8% (per the Atlanta Fed) means the US is this close form a technical recession.

Worst trade deficit since Lehman.

 

The increase in imports of goods mainly reflected increases in consumer goods ($9.0 billion), in capital goods ($4.0 billion), and in automotive vehicles, parts, and engines ($2.7 billion). A decrease occurred in petroleum and products ($1.1 billion).

The goods deficit with China increased from $27.3 billion in February to $37.8 billion in March

From the report:

The U.S. monthly international trade deficit increased in March 2015 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $35.9 billion in February (revised) to $51.4 billion in March, as imports increased more than exports. The previously published February deficit was $35.4 billion. The goods deficit increased $14.9 billion from February to $70.6 billion in March. The services surplus decreased $0.6 billion from February to $19.2 billion in March.

Exports

  • Exports of goods and services increased $1.6 billion, or 0.9 percent, in March to $187.8 billion. Exports of goods increased $1.5 billion and exports of services increased $0.2 billion.
  • The increase in exports of goods mainly reflected increases in capital goods ($1.5 billion) and in automotive vehicles, parts, and engines ($0.8 billion). Decreases occurred in consumer goods ($1.7 billion) and in petroleum and products ($0.6 billion).
  • The increase in exports of services reflected an increase in transport ($0.1 billion), which includes freight and port services and passenger fares, and increases in several categories of services of less than $0.1 billion. A decrease in travel (for all purposes including education) ($0.1 billion) was partly offsetting.

Imports

  • Imports of goods and services increased $17.1 billion, or 7.7 percent, in March to $239.2 billion. Imports of goods increased $16.4 billion and imports of services increased $0.8 billion.
  • The increase in imports of goods mainly reflected increases in consumer goods ($9.0 billion), in capital goods ($4.0 billion), and in automotive vehicles, parts, and engines ($2.7 billion). A decrease occurred in petroleum and products ($1.1 billion).
  • The increase in imports of services mainly reflected increases in transport ($0.6 billion) and in travel (for all purposes including education) ($0.1 billion).

Goods by geographic area (seasonally adjusted, Census basis)

  • The goods deficit with China increased from $27.3 billion in February to $37.8 billion in March. Exports increased $0.4 billion to $9.3 billion and imports increased $10.9 billion to $47.1 billion.
  • The goods deficit with Japan increased from $4.3 billion in February to $6.3 billion in March. Exports increased $0.2 billion to $5.6 billion and imports increased $2.2 billion to $11.9 billion.
  • The goods deficit with Germany decreased from $6.3 billion in February to $5.6 billion in March. Exports increased $0.1 billion to $4.3 billion and imports decreased $0.5 billion to $9.9 billion.

So to summarize: First 'harsh weather' was found to boost Q1 GDP, and now West Coast port strike boosted imports  with the resumption of Chinese imports in March to slam Q1 GDP into negative territory.

 

 

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Tue, 05/05/2015 - 08:41 | 6061368 papaswamp
papaswamp's picture

Got to blame something other than the degrading economy in the Pacific.

Amazing the stike stopped exports but not imports...who knew they were only striking on one side of the equation....

Tue, 05/05/2015 - 08:47 | 6061396 MonetaryApostate
MonetaryApostate's picture

Tick tock till serfdom...

Tue, 05/05/2015 - 08:52 | 6061417 PartysOver
PartysOver's picture

Change up;  Worst Since Financial Crisis.  Lehman has been demoted.

Tue, 05/05/2015 - 08:52 | 6061418 Latina Lover
Latina Lover's picture

Be of good cheer. We all know that deficits don't matter, cuz we have the RESERVE currency, for now.

Tue, 05/05/2015 - 09:20 | 6061524 MonetaryApostate
MonetaryApostate's picture

Careless economics...

Tue, 05/05/2015 - 09:32 | 6061577 TheFourthStoog-ing
TheFourthStoog-ing's picture

Maybe just put the gun to your head now and get it over with, huh?

Tue, 05/05/2015 - 08:44 | 6061372 Dr. Engali
Dr. Engali's picture

Maybe we should think about actually making stuff again before we forget how. Nah, that's just stupid. Keep printing mother fuckers. We'll all be rich Zimbabwe style. 

Tue, 05/05/2015 - 08:46 | 6061393 Headbanger
Headbanger's picture

Making stuff  is so 1960's...

Tue, 05/05/2015 - 09:16 | 6061507 firstdivision
firstdivision's picture

Making stuff, paying fair wages, taking a fair take, is so 1960's.

Tue, 05/05/2015 - 08:46 | 6061395 yogibear
yogibear's picture

"Maybe we should think about actually making stuff again before we forget how."

Not until US wages meet the global wage level.  

Tue, 05/05/2015 - 08:48 | 6061400 Headbanger
Headbanger's picture

See... A good nuclear war will solve all that in a hurry.

But noooooo...

Tue, 05/05/2015 - 09:34 | 6061590 negative rates
negative rates's picture

So 2 cents and hr still holds in china, but not here.

Tue, 05/05/2015 - 10:36 | 6061790 SilvertonguedAngel
SilvertonguedAngel's picture

Maybe we should start making robots that can do the work of 3 Chinamen then those yellow bastards will all be in the same unemployment boat as us.

Tue, 05/05/2015 - 10:44 | 6061816 SilvertonguedAngel
SilvertonguedAngel's picture

Holy crap they beat us to it...

http://www.scmp.com/tech/enterprises/article/1786484/building-work-start...

We are so screwed...

Tue, 05/05/2015 - 08:47 | 6061398 RushRoolz
RushRoolz's picture

Why? Just BTFD. We have entered a new era where logic, facts, and laws of economics have become antiquated, just as making stuff is so passe'.

Tue, 05/05/2015 - 09:21 | 6061531 Ward cleaver
Ward cleaver's picture

You mean like creat an App that follows your hamsters wheel rotations for the week?

Tue, 05/05/2015 - 08:41 | 6061373 buzzsaw99
buzzsaw99's picture

china is a maggot's best friend [sung to diamonds are a girl's best friend music]

Tue, 05/05/2015 - 08:43 | 6061382 sudzee
sudzee's picture

Would have been worse had it not been boosted by cluster bombs export to SA.

Tue, 05/05/2015 - 08:49 | 6061406 JoeTurner
JoeTurner's picture

The rickety old airplane called "global economy" is approaching stall speed followed by nose dive...

Tue, 05/05/2015 - 08:51 | 6061408 Element
Element's picture

Nah, just nominate a deflater you like - PRESTO!

Instant GDP growth.

Tue, 05/05/2015 - 08:50 | 6061410 RadioactiveRant
RadioactiveRant's picture

I'm sick of "worst SINCE Lehman", wake me up when its "worst THAN Lehman".

Tue, 05/05/2015 - 08:52 | 6061415 eclectic syncretist
eclectic syncretist's picture

And just like that the Boyz are butt-pounding the perceived value of PMs higher in the pre-market again today, probably jamming to....

https://www.youtube.com/watch?v=GXCh9OhDiCI

Tue, 05/05/2015 - 09:04 | 6061460 orangegeek
orangegeek's picture

but China GDP getting bigger, not smaller

 

sum-ting-wong!!

Tue, 05/05/2015 - 09:54 | 6061664 Mike Honcho
Mike Honcho's picture

So low GDP has nothing to do with eroding our job base, only abstract influences? I have so much to learn.

Tue, 05/05/2015 - 10:11 | 6061714 22winmag
22winmag's picture

Time to issue each citizen a 30 round pitchfork.

Tue, 05/05/2015 - 10:24 | 6061753 Goldbugger
Goldbugger's picture

All data that is coming in is pointing to another major crash. MORE QE coming for sure ,then the currency collapse commith.

Tue, 05/05/2015 - 12:53 | 6062402 AbbeBrel
AbbeBrel's picture

WSL - What Sucks Lately???

Hey Kids - I got it! China just needs to devalue their fiat - then the cheap Chinese crap can get 50% cheaper! And that will help whackoff the import number and get the US out of an impending recession. Simple, right? Right?

Crickets...

Tue, 05/05/2015 - 21:18 | 6064130 rjs
rjs's picture

if those consumer goos just came off the boat, they'll add to inventories...

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