Submitted by Tyler Durden: The boost to GDP from the declining US trade
deficit is over. While the September trade deficit number was revised
further lower, to $40.3 billion from $41.5 previously, October saw a
pick up to $42.2 billion, slightly less than the expected $42.7 billion,
but a headwind to Q4 GDP already. As a result, expect a modest boost to
Q3 GDP in its final revision, even as Q4 GDP continues to contract
below its consensus of sub stall-speed ~1%. The reason for the decline: a
3.6% decline in exports of goods and services. This was the biggest
percent drop in exports since January 2009 as the traditional US import
partners are all wrapped in a major recession. What helped, however, was
the offsetting drop in imports by 2.1%, the lowest since April 2011, as
US businesses are likewise consumed by a concerns about the global
economy. And without global trade, whose nexus just happens to be
Europe, there can be no global or even regional recovery. So far, all
hopes of a pick up in global economy have been largely dashed. Yet one
country benefits from the ongoing US slump is China: imports from China -
consisting primarily of computers and toys, games, and sporting goods-
jumped 6.4% to a record $40.3 billion, offset be a modest rise in
exports - primarily soybeans - to $10.8 billion, bring the China deficit
to a record $29.5 billion from $29.1 billion in September.
Of course, one wouldn't get that impression looking at the Chinese side
of the ledger: the Chinese Customs department, reported a September and
October trade surplus with the US amounting to $21.1 and $21.7 billion.
One wonders, somewhat, where the over $16 billion difference has gone.
Just exports:
Source
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