US merchandise trade gap expected to narrow sharply

Opposing and favorable movements in goods exports and imports probably closed the merchandise trade deficit by $6.0 billion to $69.1 billion in September, reversing all but a fraction of the stunning widening posted in August. Buoyed by yet another sizable increase in commercial jetliner deliveries to foreign carriers, merchandise exports likely jumped by 2.0% to $126.9 billion, but remained 6.9% below the $136.4 billion goods shipped in September 2014. 

On the other side of the ledger, a price-induced decline in foreign petroleum deliveries, combined with a cell phone-led contraction in other overseas goods purchases, probably pared merchandise imports by 1.9% to a seven-month low of 188.8 billion. After adjusting for reported declines in export and import prices during the reference period, the real merchandise trade shortfall is expected to narrow by $6.6 billion to $57.0 billion (Census basis, 2009$).

"If our forecast is on the mark, the $3.0-billion expansion of the inflationadjusted trade gap to $176.6 billion during the summer quarter would shave three ticks off Q3 real GDP growth", says Societe Generale.