Today's Economic Data Highlights: Trade Balance And Claims

From Goldman Sachs

The trade balance, jobless claims, and the Fed’s balance sheet….
 
8:30: The US trade balance for July…slight improvement?  This report has considerable significance for judgments about third-quarter growth given how deep the trade deficit was in June.  In real terms, the merchandise trade deficit for June was about $6bn deeper than the Q2 average.  Absent a quick reversal of this deterioration, the presumption will be that trade has continued to exert a drag—albeit (hopefully) much smaller—in Q3.  Almost all economists’ estimates for the nominal goods and services balance, including our own, lean in this direction and hence underscore the downside risks to near-term real GDP growth.  That being the case, the risk is that we are all wrong by being too conservative and that the brave soul forecasting a $43bn deficit will carry the day.
GS: -$48bn, median forecast (of 73) -$47.0bn, ranging from -$52n to -$43bn; last -$49.9bn.
 
8:30: Unemployment insurance claims….settling back into the old range?  In the last two weeks, initial claims for jobless benefits have moved back down into the upper end of the 425k-475k range in which they had fluctuated from March through most of July.  Analysts expect them to stay there.  Meanwhile, the number of recipients of continuing claims for regular state programs has drifted down slowly, and expectations again fit this pattern.  However, with the number of idle workers receiving extended and emergency benefits now fluctuating between 5½ and 6 million during periods when the programs have been in force, much of the relevant action is in this component of the report.  Last week’s data, which covered the week ending August 14 for these programs, showed this total dipping to 5.44 million, bringing the aggregate number of benefit recipients down below 10 million.
For initial claims, median forecast (of 46): 470, ranging from 460k to 482k; last 472k.
For continuing claims, median forecast (of 14): 4.45 million, ranging from 4.4 million to 4.485 million; last 4.456mm.
 
16:30: Federal Reserve balance sheet….The size of the Fed’s balance sheet remains a hair below $2.3 trillion as repayments of principal on agency debt and MBS is now being reinvested into US Treasuries.  This shift will show up slowly over time, as the amounts per week are in the $3-$4bn neighborhood.