US Q4 GDP tracking 1.6% after advance November trade report

The nominal monthly trade deficit in goods narrowed modestly in November, to $60.5bn, from the revised $61.3bn deficit in October, according to the Census Bureau's advance report on international trade in goods. The deficit was narrower than the forecast ($62.0bn) and in line with consensus expectations ($60.7bn). In terms of exports, nominal goods declined 2.0% m/m (previous: -2.4%), with decreases across all end-use categories. The "other" goods category fell 15.6% on the month, retracing last month's outsized gain. Consumer goods (-1.9% m/m, previous: -3.0%), automotive goods (-1.7% m/m, previous: -1.3%), and industrial supplies (-2.7% m/m, previous: -4.6%) exports declined the most in November, as the prices for these categories all fell. Capital goods (-0.2% m/m, previous: -2.0%) and food and beverages (-0.2% m/m, previous: -5.5%) had more modest declines.

Imports fell 1.8% m/m (previous: -0.6%) in nominal terms. Food and beverages (0.8% m/m, previous: -4.0%) and automotive (0.2% m/m, previous: 1.0%) rose on the month; all other categories decreased. Consumer goods imports fell a sizable 6.0% (previous: 0.5%). Capital goods (-0.8% m/m, previous: 1.1%) and industrial supplies (-1.3% m/m, previous: -5.3%) had modest declines.

Alongside trade prices already reported by the BLS for November, this morning's data suggest that the real goods deficit narrowed slightly on the month, against the expectations of a modest widening. This implies a smaller drag from net trade in Q4 and a modest boost to GDP growth. This effect was partially offset by better-than-expected net exports of capital goods that trimmed the estimate of equipment investment. Overall, the Q4 GDP tracking estimate rose one-tenth, to 1.6%.