He sees that the deterioration resulted from both imports rising by $1.0 billion (2.7%) and exports falling by $0.4 billion (-0.9%). On a volumes basis, there was a modest deterioration in the deficit as imports rose by 2.5% and exports managed to eek out a 0.1% gain.
He writes, “The deterioration in the November trade deficit on a volumes basis combined with the sizeable revision in the previous month points to a weakening in net trade relative to the third quarter of 2012 and provides some material downside risk to our expectation that net exports could make a sizeable contribution to real GDP growth to close out 2012.”
On its own, this would suggest some downside risk to our forecast for real GDP growth to post an annualised 1.6% increase in the fourth quarter of 2012; however, the rise in imports suggests that there should be some offset from stronger domestic demand, and we continue to expect that growth will improve on the disappointing 0.6% gain recorded in the third quarter of 2012.
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