"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Friday, December 10, 2010

The Trade Deficit Is Looking... Well... Not Terrible

The International Trade balance is out now. This is our nation's net exports. If the number is positive, we are exporting more than we are importing. If it is negative, we're importing more. This is one of those huge market movers, because net exports are a component of GDP calculations. Positive numbers mean a (potentially) improving GDP, while negative numbers mean a (potentially) worsening GDP.
And the estimates for this month indicate a potentially worsening GDP. For September, we came in at a net -$44.0 billion. Looking to October, the analysts are anticipating a second month at -$44.0 billion. As long as we don't come in worse than this, traders will feel minimal need for sorrow.
And where does that international trade balance stand? Well, counting both goods and services, we exported $168.7 billion and imported $197.4 billion in October. That works out to a net of -$38.7 billion, which is a substantial 12% improvement from September. Total exported goods came in at $112.3 billion and goods imports came in at $163.7 billion (a net of -$51.4 billion, which does represent a $5.7 billion improvement from September). Total exported services came in at $46.4 billion while services imports came in at $33.7 billion (a net of $12.7 billion, a $0.2 billion improvement from September).
All in all, not too bad. It would have been nice to see even more improvement in manufacturing exports - since that would be a really nice sign for the US manufacturing and production sectors - but I guess we shouldn't look a month-over-month 10% improvement in the mouth.

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