Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Trade Deficit in Goods and Services Came in at $40.1 Billion in August
Posted Under: Data Watch • Trade

 
Implications: Exports increased faster than imports in August, with the US trade deficit shrinking slightly to $40.1 billion. As a result, it now looks like net exports will add about a full percentage point to real GDP growth in the third quarter, consistent with our forecast that real GDP grew at about a 3% annual rate in Q3. The best news from today's report was that the total volume of trade – imports plus exports – hit a new all-time record high, underscoring continued improvement in the US economy. Over the next few years, higher energy production in the US due to hydraulic fracturing and horizontal drilling along with seismic imaging will continue to transform our trade relationship with the rest of the world. Nine years ago, back in August 2005, the US imported 11 times as much petroleum product as it exported. Since then, petroleum product exports are up 602% while imports are up only 23%. So now, petroleum product imports are only 1.9 times exports. Finally, policymakers are helping this trend, with the Commerce Department giving two companies permission to ship a type of ultralight oil known as condensate to foreign buyers. Given the huge glut of oil in the Permian Basin in Texas, we expect more moves to allow exports over the next couple of years, and for oil prices to keep trending lower. As a result of both the pre-existing trends and new policy direction, we expect the US to move to a petroleum trade balance and perhaps even surpluses in the next few years. In other recent news, automakers sold cars and light trucks at a 16.4 million annual rate in September, down 6.3% from August, but still up 6.6% from a year ago. Plugging this into our models suggests "real" (inflation-adjusted) consumer spending grew at a 2% annual rate in Q3.

Click here for PDF version
Posted on Friday, October 3, 2014 @ 10:55 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.