Leading indicators of the balance of goods trade were released today.
figure 1: The merchandise trade balance in billions of SAAR (blue, left axis), and as a share of monthly GDP (tan, right axis). Dates of peak-to-trough recessions as defined by NBER are shaded in gray. BEA/Census, Advance Economic Indicators, IHS Markit, NBER, and author’s calculations.
Exports fell 3.1% and imports fell 7.6% in value (USD) (seasonally adjusted, monthly). Both fell sharply, with consumer goods seeing the largest declines in both categories, while motor vehicles and related products also contributed to the drop in imports.
Note that for imports and exports, the flow of goods dominates both goods and services.
figure 2: SAAR for goods exports (blue) and exports of goods and services (tan) in billions of dollars. Dates of peak-to-trough recessions as defined by NBER are shaded in gray. BEA/Census, Advance Economic Indicators, and NBER.
Figure 3: ICargo port SAAR (blue), and cargo and service ports (tan) in billions of dollars. Dates of peak-to-trough recessions as defined by NBER are shaded in gray. BEA/Census, Advance Economic Indicators, and NBER.
Goldman Sachs raised its tracking forecast for 4Q GDP to 2 percentage points q/q SAAR, up 0.3 percentage points, based on the sharp drop in imports.
Note that while lower-than-expected imports boost immediate forecasts of GDP conditioned on other indicators (i.e., in an accounting or “bean-counting” sense), falling imports behaviorally imply slower economic growth (staying constant variable spending switching effects – but the dollar has been strong for months).
