U.S. trade deficit to show big drop in March, advanced report indicates

[mahatmakanejeeves]

Source: MarketWatch, aka Dow Jones

U.S. trade deficit to show big drop in March, advanced report indicates

Published: Apr 27, 2016 8:56 a.m. ET

Trade gap in goods fell 9.5% in March

By Jeffrey Bartash
[e-mail]

An early look at U.S. trade patterns in March points to a sharp drop in the nation’s trade deficit. The trade gap in goods — services are excluded — fell 9.5% to $56.9 billion. The goods deficit was $62.8 billion in the prior month.

See advanced trade report.

A smaller deficit in March could give first-quarter gross domestic product a nudge upward, though the number is still expected to be weak. A smaller deficit adds to GDP.

The U.S. government will release overall trade numbers for March next week, but the size of the trade deficit is generally tied to changes in exports and imports of goods. Trade patterns involving services rarely change much from month to month. ... In February, the government previously reported that the total U.S. trade deficit rose slightly to $47.1 billion.

On Thursday, the government is expected to report weak growth in the first quarter. Economists polled by MarketWatch forecast a 0.7% increase in GDP, down from 1.4% in the final three months of 1.4%.




Read more: http://www.marketwatch.com/story/us-trade-deficit-to-show-big-drop-in-march-advanced-report-indicates-2016-04-27

[whatthehey]

1. It will be bad news

Doomers have built up a moebius approach to trade deficits over the decades. If they grow, it's because the US doesn't make anything any more so we're heading into the shitter. If they decrease, it's because nobody has any money to buy imports any more so we're heading into the shitter. It's the global macroeconomic version of UE numbers, where the participation rate is the key figure if it twitches down, but the UE rate is more important if participation twitches up, increasing the benchmark rate.

[forest444]

2. There's a lot of truth to that.

It always speaks well of an economics article writer when they mention the change in gross domestic purchases when discussing GDP releases.

This figure, as the name implies, only takes domestic demand into account - which tends to grow a little faster than GDP in good times and decline faster than GDP in recessions. This isn't to say trade balances aren't important; but as you pointed out, people can sometimes read too much into them.