US: April's data suggests trade will likely provide a modest boost to Q2 GDP growth – Wells Fargo
|Data released on Tuesday showed the US trade balance deficit narrowed to 68.9 billion in April, from a record of 75 billion in March. Analysts at Wells Fargo point out April's trade report suggests net trade will likely provide a modest boost to second-quarter GDP growth.
Key Quotes:
“The goods trade deficit narrowed by $6.2 billion in April, the most since early 2019. Goods exports rose 1.1%, boosted by a 4.9% gain in capital goods ex-automotive exports, where civilian aircraft accounted for a majority of the gain, in part reflecting renewed demand for travel.”
“Goods imports slipped 1.9% and were held back by a 3.9% drop in consumer goods. Consumer goods imports still remain about 25% ahead of where they were prior to the crisis in February 2020.”
“April's report posses upside risk to our currently published forecast for net exports to subtract 1.3 percentage points from headline GDP growth in the second quarter. Imports came in much weaker than we were previously expecting, and suggest net exports may provide a modest boost to Q2 headline growth instead.”
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