Prior Prior Revised Consensus Actual
Trade Balance Level $-43.6 B $-43.8 B $-44.5 B $-43.7 B
A decline in imports held down March's international trade gap to $43.7 billion which is moderately under Econoday's consensus for $44.5 billion. But the breakdown doesn't point to cross-border strength as exports fell 0.9 percent to $191.0 billion in the month against a 0.7 percent decline for imports at $234.7 billion.
The petroleum gap widened sharply in the month to a nearly 2-year high of $7.9 billion and reflects higher prices for imports and a decline in exports. Exports showing the most weakness are industrial supplies, autos, and consumer goods. Foods rose slightly in March as did the key category of capital goods which otherwise has been flat.
On the import side most components are lower especially capital goods in what, along with capital goods shipments and nonresidential construction spending, is another contrast with the first-quarter GDP surge in nonresidential investment. Contrasting with the weakness in imports is a rise in imports of autos, up a sharp $1.2 billion in the month to $30.3 billion.
Country data are in line with trend: the nation's trade gap with China totaled $24.6 billion in the month followed by the EU at $11.2 billion with Japan at $7.2 billion and Mexico at $7.0 billion. Canada is next at a distant gap of $1.4 billion.
Breaking down the data between goods and services shows a small widening in the goods deficit to $65.5 billion offset in part by a modest looking but still constructive $0.4 billion dollar rise in the surplus on services. The overall decline in exports and imports is a concern, but today's report has several positives, not only the surplus on services but also the rise in capital goods exports. Today's report should give a modest and badly needed lift to revision estimates for first-quarter GDP.
Source: Bloomberg
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