December 2018 Trade Data Mixed With Imports Improving And Exports Now Contacting

Trade data headlines show the trade balance worsened from last month - and the rolling averages for exports and imports declined.

Analyst Opinion of Trade Data

The data in this series wobbles and the 3 month rolling averages are the best way to look at this series. The 3 month averages slowed for both exports and imports. However, for this month - exports improved and exports declined - hence a worsening trade balance.

Econintersect uses the trade balance as a factor in determining the acceleration or deceleration of the economy - but does not believe the negative trade balance per se is an economic issue.

Note that the headline numbers are not inflation adjusted - and if one inflation adjusts, the year-over-year growth is less than economic growth for exports.

  • Imports of goods were reported up month-over-month - import goods growth has positive implications historically to the economy. Econintersect analysis shows unadjusted goods (not including services) growth accelerated 0.3 % month-over-month (unadjusted data) - up 3.4 % year-over-year (up 3.9 % year-over-year inflation adjusted). The rate of growth 3 month trend is decelerating (rate of change of growth declined).
  • Exports of goods were reported down month-over-month, and Econintersectanalysis shows unadjusted goods exports growth deceleration of (not including services) 5.1 % month-over month - down 1.4 % year-over-year (down 2.5 % year-over-year inflation adjusted). The rate of growth 3 month trend is slowing.

(Click on image to enlarge)

  • The headwind in seasonally adjusted (but not inflation adjusted) for exports was wide spread except for consumer goods and autos. The strength in imports was capital goods and consumer goods
  • The market expected (from Econoday) a trade balance of $-58.2 B to $-45.0 B (consensus $57.6 B billion deficit) and the seasonally adjusted headline deficitfrom US Census came in at $59.8 billion.
  • It should be noted that oil imports were down 11 million barrels from last month, and down 14 million barrels from one year ago.
  • The data in this series is noisy, and it is better to use the rolling averages to make sense of the data trends.
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