September Trade Revisions Will Add 11 Basis Points to 3rd quarter GDP

Our trade deficit fell by 15.0% in September, virtually reversing the 15.6% jump in August, as the value of our exports rose and the value of our imports fell.  The Census report on our international trade in goods and services for September indicated that our seasonally adjusted goods and services trade deficit fell by $7.2 billion to $41.8 billion in September from an August deficit which was revised from $48.3 billion to $48.0 billion.  The value of our September exports rose $3.0 billion to $187.9 billion on a $2.9 billion increase to $127.3 billion in our exports of goods and an increase of $0.1 billion to $60.1 billion in our exports of services, while our imports fell $4.2 billion to $228.7 billion as a $4.4 billion decrease to $187.6 billion in our imports of goods was partially offset by a $0.1 billion increase to $41.1 billion in our imports of services.  Export prices averaged 0.7% lower in September, so the real growth in exports was greater by that percentage, while import prices were 0.1% lower, similarly incrementally increasing growth in real imports...

Referencing the Full Release and Tables for September (pdf), Exhibit 7, we find that a $1,278 million increase to $17,042 million in the value of our exports of consumer goods was a major driver of our September increase in our exports.  Included in that was a $536 million increase in our exports of art and antiques, a $336 million increase in our exports of jewelry, a $266 million increase in our exports of cell phones and similar goods, and a $222 million increase in our exports of pharmaceutical preparations.  Our exports of capital goods also increased by $892 million to $45,319 million as we exported $327 million more electric apparatuses, $307 million more industrial engines, and $260 million more civilian aircraft engines.  In addition, our exports of foods, feeds, and beverages rose by $388 to $10,809 on a $605 million increase in our exports of soybeans, which was partially offset by a $184 million decrease in our exports of corn, and our exports of vehicles, parts and engines rose $167 million to $12,946 million.  A $33 million decrease to $35,155 million in our exports of industrial supplies and materials was the only end use category of exports to see a decrease, as a $469 million increase in our exports of fuel oil was offset by a $217 million decrease in our exports of other petroleum products and a $178 million decrease in our exports of crude oil, while our exports of goods not categorized by end use rose by $75 million to $5,281 million.

Exhibit 8 in the Full Release and Tables gives us details on our imports and shows us that our imports of every end use category except foods, feeds, and beverages, which were up by $52 million, decreased in September.   Our imports of industrial supplies and materials fell by $1,583 million to $38,454 million on a $1,283 million drop in our imports of crude oil and a $192 decrease in our imports of nuclear fuel materials.  Our imports of capital goods fell by $1041 million to $49,237 million on a $558 million decrease in our imports of civilian aircraft, a $386 million decrease in our imports of telecommunications equipment and decreases in our imports of medicinal equipment, semiconductors, electric apparatuses, computer accessories, and excavating machinery in excess of $100 million each, which were partially offset by a $693 million increase in our imports of computers.   In addition, our imports of vehicles, parts and engines fell by $831 million to $28,780 million, our imports of goods not categorized by end use fell by $494 million to $7,142 million, and our imports of consumer goods fell by $442 million to $51,356 million on a $530 million decrease in our imports of cell phones, a $468 million decrease in our imports of gem diamonds, and a $433 million decrease in our imports of synthetic textiles and apparel, which were offset by an increase of $1,183 million in our imports of pharmaceutical preparations and an increase of $416 million in our imports of televisions and video equipment.

This 3rd month of the quarter international trade report, typically released about a week after the release of an advance estimate of GDP, formerly resulted in major revisions to GDP.  However, as of the second quarter, the commerce department began releasing an advance report on our trade in goods, the most volatile part of our monthly trade, to give the BEA a fair clue as to what the monthly and hence quarterly trade would be.  That advance report for September, released last week, indicated $126,868 million in exports of goods in September and $185,501 million in imports of goods.  This report revised September exports up to $127,323 million and revised imports up to $187,616 million, a swing of $1,660 million in imports over exports from the figures used by the BEA when reporting 3rd quarter GDP.  In addition, the August trade deficit was revised from $48,330 million to $48,017 million. which was a net $3,130 million improvement in the August balance.   Subtracting the negative change in the advance estimate for September from that August improvement reduces the net revision to $1,530 million on a monthly basis, or about $18.5 billion annualized.  That improvement in our balance of trade from the previously published figures should add 0.11 percentage points to 3rd quarter GDP when the 2nd estimate is released at the end of November.


(NB: the above was crossposted from Marketwatch 666)

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OK rjs

Gonna hold ya to it. Nice analysis.

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real imports were just revised up

the October Import -Export price index showed September import prices down 0.6%, not the down 0.1% previously reported..export prices for September were revised from -0.7% to -0.6%...other prices back to July were also revised...on the other side of the coin, wholesale inventories were up 0.5%; the BEA assumed they'd be down...

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rjs

preliminary adjustment of 3rd quarter trade for revised prices

a month ago, the BLS reported that September import prices were 0.1% lower, while September export prices were reported to be 0.7% lower; with the Import and Export Price Indexes for October, September import prices were revised to 0.6% lower, while September export prices were revised to indicate they were 0.6% lower...since the BEA used the former figures in their advance GDP estimate, that means our real imports, after adjusting the dollar value of them for those changes in prices, were 0.5% higher than was reported in the GDP report, while our real exports were actually 0.1% lower...the September trade report indicates goods imports of $187.6 billion, and goods exports of $127.3 billion, so thus real imports for September were approximately $0.94 billion higher than those included in the GDP report, while real exports were roughly $0.13 billion lower...annualized, those changes would subtract around $4.4 from real net exports in the 3rd quarter, which in turn would subtract around 0.03 percentage points from 3rd quarter GDP...

 

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rjs