US Trade Deficit

The US Trade Deficit narrowed to 58.2 Billlion.  This is good for GDP. The dollar is getting a bid off of that.  Imports slowed and exports also slowed.  This indicates slower US and possibly slower global growth as well. 

The market does not really know how to interpret the data I feel.   On one side, a lower deficit is a boost to GDP.  On the other side, the slower imports and exports is a sign of weak domestic economy.  So, expect pushes one way, then the other.  

Worse than expected.

Import Prices highest year increase on record.  Import prices up 10.9% year.  2.9% excluding oil for the year.  Deflationary effect of cheaper imports is waning as prices go up. 

The US Trade Deficit is to be released at 8:30.  Improvement in this series has been the bright spot for the US economy as the weak dollar has helped make US goods more competitive overseas. 

On the flip side is the effects of oil imports.  Since the US is dependent on imported oil, when the oil price goes up it causes the absolute value of imports to go up as well -  negating some of the export growth gains.  As a result, the gains from the dollar are not fully appreciated.

 Prior revised to 56.8 billion from 57.6 Billion.

Imports increase by 1.2B

Exports increase by 1.5B

Import Prices increase by 1.8% versus expectations of 1.2%.

This is a 28 month low for the Trade Deficit. 

The US Trade Deficit is to be reported today.  Expectations are for it to get worse falling to -59.0B from -57.6B.  This may be due to the price of oil increasing the cost of oil imports.  The number will be watched to see if the trend of increasing exports continues as a result of the declining dollar

The following chart shows the breakdown of Imports and Exports: