Q1 GDP At Risk As Trade Deficit Balloons Near 9 Year Highs

Tyler Durden's picture

On the heels of a disappointing revised Q4 GDP print, the US trade balance for January printed a $69.2 billion deficit. This is the second largest deficit since August 2008 (slightly smaller than the March 2015 plunge) as the dollar surge has not helped.

The biggest driver the deficit increase was  4.8% MoM increase in Consumer Goods (notably Auto exports rose 9.3%)

The $69.2bn deficit is considerably worse than the $66.0 billion expectations, and is lower than the lowest analyst expectation.

Certainly not a good sign for Q1 GDP expectations.

As BofAML notes, combining trade data with inventories for January, this slices 0.2pp from Q1 GDP tracking, leaving us at 1.8% for the quarter.

The USD strength has not helped...

 

So time for another rate hike to reverse that recent drop in the USD and stymie the US economy even more via its trade deficit?

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NugginFuts's picture

Guarantee this will all be spun as good news before open and gold will get the monkey hammer below 1250 by noon.

Bad news is good news, good news is better news.

All hail Dow 21k!

GUS100CORRINA's picture

Even with all the exported oil!

Amazing.

Clint Liquor's picture

 By definition, there is no such thing as a 'trade' deficit. They send their labor, raw materials and production capacity and we 'trade' by sending them 'money' created out of thin air. No deficit.

The 'trade deficit' and the 'budget deficit' are roughly the same. Can one exist without the other and more importantly is it sustainable?

 

xythras's picture
xythras (not verified) Feb 28, 2017 8:48 AM

Blame China

Yen Cross's picture

  More shitty "hard" macro please.   I gotta hunch the usd/jpy is in for a rough day if CONsumer CONfidence comes in soft.

Justin Case's picture

No shit sherlock. Could be why every country out there are destroying their currencies to have a trade advantage and keep their economy running. High currency valuations  are not condusive to growth other than a trade deficit.

JTimchenko's picture

Time to buy gold.

Justin Case's picture

Alan Greenspan, the near-legendary Fed chair whose every utterance used to be parsed by market watchers, spoke before the Council on Foreign Relations and advised listeners that under current conditions, gold is probably a good investment.

Zorba's idea's picture

Barry's Legacy...the gift that keeps contracting