FXstreet.com (Barcelona) - Paul Dales, Senior US Economist for Capital Economics has had a look at todays US Trade Balance figures and believes there is more to the story than the eye meets.
He explains that the figures aren’t as good as they look and it is just a matter of time before the deficit widens more significantly as the global slowdown takes a greater toll on US exports.
He continues to explain that, “July’s deficit of $42.0bn was better than the consensus forecast of $44.0bn. What’s more, June’s deficit was revised down to $41.9bn, from $42.9bn. But things would have been much worse if it wasn’t for a price-related fall in oil imports.”
When excluding petroleum, the deficit actually increased to $21.1bn from $19.4bln whilst in real terms, “it widened to $46.5bn from $44.0bn.”
Dales believes that, “The more recent rebound in oil prices means that in the coming months oil effects will push the deficit wider by around $4bn. What’s more, the 1.0% m/m decline in exports may be a sign that the global slowdown is hitting US producers.”
Overall, he sees that increase in the deficit will be a drag on overall GDP in the second Q of next year.
He explains that the figures aren’t as good as they look and it is just a matter of time before the deficit widens more significantly as the global slowdown takes a greater toll on US exports.
He continues to explain that, “July’s deficit of $42.0bn was better than the consensus forecast of $44.0bn. What’s more, June’s deficit was revised down to $41.9bn, from $42.9bn. But things would have been much worse if it wasn’t for a price-related fall in oil imports.”
When excluding petroleum, the deficit actually increased to $21.1bn from $19.4bln whilst in real terms, “it widened to $46.5bn from $44.0bn.”
Dales believes that, “The more recent rebound in oil prices means that in the coming months oil effects will push the deficit wider by around $4bn. What’s more, the 1.0% m/m decline in exports may be a sign that the global slowdown is hitting US producers.”
Overall, he sees that increase in the deficit will be a drag on overall GDP in the second Q of next year.
