Gold overstates narrowing in January international trade deficit

Wells Fargo Research Team Wells Fargo

Summary

The U.S. international trade data continue to be whipsawed by the flow of non-monetary gold and broader investment-related categories. These data won't translate directly to what is included in GDP accounting, and thus the $18.4 billion narrowing in the January trade deficit overstates the growth impact.

Beyond investment-related metal flows, all the action continues to take place in high-tech related goods, with the export and import of items like computers and semiconductors rising sharply. The U.S. imports much more of these products than it exports, leading the trade deficit in high-tech related goods to widen sharply since the end of 2023.

We continue to expect the overall U.S. international trade deficit to widen again over the course of the year as we suspect some pent-up demand for import growth is overdue and some near-term tariff clarity may lead importers to try and secure product.

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Wells Fargo Research Team

Wells Fargo

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