Welcome to another nasty set of trade data numbers.
The Census Department Advance Trade Data shows the trade deficit widened by 11.1 percent in May.
- The international trade deficit was $96.6 billion in May, up $9.6 billion from $87.0 billion in April.
- Exports of goods for May were $179.2 billion, $9.7 billion less than April exports.
- Imports of goods for May were $275.8 billion, $0.1 billion less than April imports.
I have slightly different numbers because I subtract advance numbers from previous full data numbers rather than from precious advance numbers.
Goods Exports and Imports
I see little sense in making comparisons to numbers know to be wrong. So I compare advance numbers to the more accurate full data.
Doing so, I have imports down 2.082 billion and exports down 11.225 billion.
I calculate an increase in the deficit of 10.5 percent vs the reported 11.1 percent.
Impact on GDP Estimates
These numbers are much worse than the consensus estimates.
But it’s what the GDPModel expects, not what economists expect, that will matter to tomorrow’s GDPNow report.
My guess is that the model did not expect this negative change. Is accurate, then GDPNow will decrease for this data point.
However, there are many significant reports in the last two days, including a whopper of a revision to first-quarter GDP.
Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means
Earlier today, I reported Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means
Given poor retail sales, I thought PCE was high. And now we see huge revisions from the first contribution estimate of 1.21 down to 0.31 and that does not factor in May .
Today the Commerce Department reported International Trade was -96.6 billion bigger than the highest Bloomberg estimate. That means more inventory front-running.
Tomorrow the BEA reports personal consumption expenditures for May. The Consensus is +0.2 percentage points. I’ll take the under.
These changes are so wild that I do not know how the GDPNow model will react to them.
Upon reflection, and at the risk of looking silly, I will take a stab at 1.0 percent lower on the GDP revisions and tomorrow’s PCE report, plus another 0.5 percent lower for this data.
That would put GDPNow at 1.9 percent with another month of data to come. No apologies if wildly wrong.
I am more interested in the Blue Chip estimate that will accompany the GDPNow report.
Related Posts
June 17, 2025: Retail Sales Down Much More than Expected, Drop 0.9 Percent
Retail sales declined 0.9 percent led by autos down 3.5 percent.
June 23, 2025: Existing-Home Sales Rise 0.8 Percent in May, Inventory Soars
Existing home sales rose but flounder at low levels. Rising inventory will eventually impact prices.
June 25, 2025: Is the GDPNow Nowcast for the Second Quarter Overstated?
I had a conversation with GDPNow creator Pat Higgins on the difficulty of making estimates.
SPY made a new all time high. The Big and Ugly might sent it down. 1M SPY is #8 (SPX was #8 in May). 3M SPY is #9. If the market moves down hope will rise. It activate Trillions on the sideline. The flow will move the markets up, above #8. CNBC permanent optimism is bs.
Welcome back.
The 3M Trade deficit: import plunged. Q2 GDP fake positive. The Mag 7 corp profit is sky high. Tesla was cannibalized by the ev competition. AMD cannibalized NVDA.
Payroll taxes are rising.
Is this a “sell below cost and make up the difference on volume” kind of thingy?
Off topic – I am surprised that Mish hasn’t chimed in on the impending death of the Big Beautiful Bill. It really looks like it’s going down, thanks to the Senate Parliamentarian. Hopefully he does a post about it soon.
If we can’t kick illegals off Medicaid, then we are SCREWED as a nation.
Meanwhile, on the agriculture front. Our exports of grains and other agricultural products are falling precipitously as foreign consumers no longer view our products as “premium” and even if they do, do not want to put them in their bodies.
Perception is reality folks, and Trump is harming our exports “bigly”
So not Roundup / GMO or Red Dead Dye # 666 related?
Funny!
Nestle thought so too today.
Directly from the USDA web site:
Outlook for U.S. Agricultural Trade: May 2025 James Kaufman, coordinator Hui Jiang, coordinator Angelica Williams, contributor
The last two columns are forecasts for Feb & May of 2025
2019 2020 2021 2022 2023 2024 2025 2025
Exports 140.1 139.7 171.8 196.1 178.2 174.4 170.5 170.5
Imports 141.4 143.4 163.3 194.1 195.3 206.2 219.5 220.0
Balance-1.3 -3.7 8.5 1.9 -17.2 -31.8 -49.0 -49.5
What a garbage post. I’m going to go Mish scorched earth on and call out your BS. Here lately I’ve tried to avoid throwing around the BS phrase. Maybe you’re looking at some other hijacked data, but it’s CLEAR from this official USDA Report that US agro exports have been falling since their peak in 2022.
Another part of the report lists US Agro Grain exports values from Oct ’24 – Mar ’25 as $18.951B to $18.953B which is NOT falling over the course of that interval.
BIGLY my ass. You’re just a BS spreader extraordinaire.
And the crazy thing is that you get likes from posters who don’t question what you’re saying.
These forecasts were made on the same day as Trumps tariffs were announced! Using bad data to support you wobbly position is typical and cited events before the tariffs occurred.
Therefor the effects of the tariffs are not yet seen in any “projections”.
.
Corn prices have fallen 35.75 cents per bushel in the last month (7.78%).
Demand also fell for U.S. beef in China and many Chicken and Pork products.
A friend of mine owns the largest Abattoir in Australia and is chuckling at how nicely his margins have increased by the new demand from China. Feet on the ground baby is how I know this.
This drop in foreign demand has helped lower egg prices and the price of chickens we will be grilling on the Fourth of July.
Also I do not rely on forecasts, I rely on actual “LOADINGS” which have fallen.
So yes, we will follow up on this to see who is correct.
The report I used has REAL data up through the first of 2025. Again, total agro exports have fallen since 2022. That’s a FACT.
EVERYONE knows agro exports to China are going to fall. That’s not unexpected.
Yes, time will tell how all of this plays out.
Tell your friend we’re happy his margins have increased. How long they stay that way is hard to so, but I for one am happy for him. US agro is going to be just fine despite all the noise. The world has to eat, Frosty.
This all very long from being finished.
Perhaps, but I do not use information dated the first of 2025 to make decisions that have seen massive shifts in the underlying fundamentals and reliability of the counter-party.
In this case, the counter-party has become belligerent and threatening.
Some costs will be lower like fuel and fertilizers (potentially). Farming is a fuel and fertilizer intensive business. Most of the farmers I speak to did not hedge their fuel costs so they will benefit from the takeover of Iranian oil.
I made my decision not to plant corn or soybeans after the tariff announcements. And at these falling prices, profitability for many farmers is questionable. Look at the futures charts and continuing falling corn and soy look like they are inevitable. If Corn breaks below $4.00 expect to hear the farmers howling! Farmers will be coming out of their barns with pitchforks if the tariffs cause prices to fall to $3.50 per bushel.
Go with real-time or more current data and check on loadings and shipments since they reflect the change in fundamentals.
Check on the grain cargoes that were rejected by China and had to look for buyers. This is a complicated game.
So… I call your BS and up the pot.
Farmers dont like it, well even more Americans are not liking getting squeezed by inflation, particularly in housing costs, that is the result of money printing, which most farmers and yes everyone voted for, done by the govt to finance the trade deficit. I’m not defending Trump because he is negating the savings with his huge deficit spending bill but the tariffs are meant to keep more money in the US and reduce the unsustainable bad money printing and rate suppression.
Is your friend Chinese? That could explain his optimism.
No, he is of Dutch decent. Family arrived from Europe as immigrants and built their business from scratch.
Hard work, lots of travel buying cattle and sheep from stations all over the country. Then processing them and selling the products all over the world.
You may want to step out of your silo once and a while!
😉
Stranger is the fact that you do not consider the market forces that influenced these OLD statistics and projections which since the tariffs were enacted, or not, or enacted, or not…
In 2020 exports fell for two reasons: covid and tariffs. They rebounded strongly in 2021 and 2022 as nations re-stocked and increased inventories. After the inventory re-build, exports fell as things normalized.
These numbers move for actual reasons and are not simply for your political convenance.
Reduced agriculture exports will definitely conserve American soil, and help out with farm labor shortages
Yes, and on point for what is going on – on my land.
That said, beware of Russian wheat production in the future. Land that was once non-tillable is now productive because of the warmer climate.
Russia is the largest exporter of wheat, Australia second, Canada third and the U.S. is in fourth place. Not on the podium…
Speaking of “Winning” (sarc)
Canada has won the battle for the $20 billion dollar VW Solid State Battery Giga Factory facility!
This is no joke kiddies… VW’s subsidiary PowerCo has licensed ~ and is the largest investor in Quantum Scape (QS) which recently announced that it can now reliably produce solid state batteries 25 times faster than before, with a far smaller production footprint.
In many ways this makes the Internal combustion engine obsolete.
Like Trump, obsolete.
Of course the U.S. did not win the contract for the site because of its ultra aggressive tariffs and split with NATO. This has alienated us from Europe and Germany.
No small wonder that out exports are down 5.9%.
The world is boycotting the bully!
VW – and whatever name Chrysler is today, figured out that they don’t have to pay for the workers healthcare costs in Canada.
Exactly, the US can’t win every deal.
Look, I’m invested in QS to the tune of 300 shares with an average cost basis of $4.89. It just shot up nicely because they’ve announced a positive move to production milestone. Wonderful, but they’re still 2-3 years away from having a 1st gen SSB product which may or may not be cost competitive.
However, GE has decided to move in China washing machine production to KY.
GE Appliances to move washing machine production from China to Kentucky in $490M investment
Again, this Frosty / President Musk guy is doing mental gymnastics to create false narratives. Trump is 5 months in office & he’s quickly getting all sorts of manufacturing to return to the US. We are definitely into a phase of much larger gains than loses.
I’m into QS many thousands of shares by selling hundreds of put options on the company on a weekly basis over a three year period. My cost basis is well below ZERO!
Most of those GE style manufacturing decisions were already made because of the supply disruptions that occurred during covid.
China became unreliable as a supplier due to the shutdown of its society just like the U.S. has become and unreliable buyer as a result go the tariffs.
Sure, the high tariffs will spur a few to move Mfg to the U.S. because tariffs are a regulatory force of shifting costs to the manufacturers that import and the consumers that buy imported goods or services.
Market forces of themselves are more efficient for producing goods and services without the interference of high tariffs.
Not sure how great a GE refrigerator will be that is made by some meth-head hickerbilly from KY!
😉
“Most of those GE style manufacturing decisions were already made because of the supply disruptions that occurred during covid.”
You’ve ALWAYS have an excuse.
Good luck with your options!
Gee thanks!
There are excuses and reasons: Capital expenditures like building a factory are researched and responsibly made well in advance.
Stock trading only involves a small amount of luck. It is usually years of learning and some hard knocks before one becomes successful.
Although selling puts or covered calls is certainly a higher odds transaction.
In U.S., “healthcare” is 20% of the “economy”, but only 4% weight in CPI.
If GE pulls out the specs from their dusty metal file cabinets to make washers and dryers same as about 45 years ago, that would be great. Likewise with ranges back to the ’90s.
Correct, and VW lost lots of U.S. market share in the Diesel-gate debacle.
Most of these batteries will go to Europe and Canada first. Canadians are no longer buying U.S. manufactured cars.
Stellantis? (sp) has yet to license QS’s technology.
>
That must explain Canada’s stellar growth rate outstripping that of the US.
Canada did not see the U.S. as a potential enemy before Trump. Now they do! Things are different and border crossings have fallen over 50%. Canadians are repatriating their assets surprisingly quickly and this is supporting the Canadian dollar and increasing consumption. Falling exports and tariff confusion are creating havoc among producers and increasing animosity against Americans.
Elections have consequences!
I was reading up on the havoc that the tariffs are creating for the US auto industry in particular. Lots of layoffs. If the goal was to bring jobs back, it doesn’t seem to be happening in that industry.
Anecdotally, I’ve noticed some food price increases lately that are likely because of the tariffs since they are items that aren’t grown in the US.
I don’t trust anecdotal data.
The auto industry was heading towards layoffs.
They just signed a massive new contract a year or so ago.
Dealer lots are stacked with all sorts of vehicles that aren’t selling, especially Dodge.
The US big three is at fault for too expensive overengineered vehicles. They lobbied for money printing and rate repression which drove up the housing costs of their workers so the workers strike plus they probably have burned tons of cash on stock buybacks to enrich mgmt, so theres no sympathy for them. If they want their companies to survive they can quit lobbying for money printing and build durable vehicles without all the fancy luxury stuff so Americans can afford them.
Speaking of things being made either here or there…
Talking bullshit and putting it in writing are apparently two different things:
“Trump Mobile still claims its phone is ‘Made in the USA.’ But it pulled that language from its site”
https://www.cnn.com/2025/06/26/tech/trump-t1-phone-made-in-us-website-change
The whole world is now banning the United States due to Trump’s tariff. RIP USA 1776 – 2025.
90 deals in 90 days.
How many deals has Trump got?
Don’t worry. Expiry date has been extended.
Trump is handing world trade to China and the BRICs. Who knows 10 years from now trump may have done the world a favor and we can all trade without interference actually FREE TRADE, sorry just woke up from a dream.
the answer is
“gather the data you want”
“publicize the results you need”
And in keeping with government stats this little ditty from a Substack contributor David Haggith that subtitles his articles The Daily Doom:
“Meanwhile, Federal Reserve chief, Jerome Powell, expressed—again—his worries about the continuing decline in government statistics that the Fed has to work from, particularly by the Bureau of Lying Statistics, which had a horrible track record when it comes to telling the truth to begin with. Right when we need good statistics in order to see clearly how the trade war is really impacting the balance of trade and how tariffs are impacting inflation and how DOGE is impacting unemployment lines, we have government agencies reporting that they are measuring statistics in fewer cities (having already downshifted the number of cities last month). In those cities they are still tracking, they are also now relying 30% on guesswork as the number of businesses reporting continues to diminish.”
https://www.indexbox.io/blog/federal-reserves-jerome-powell-raises-concerns-over-economic-data-quality/
Finagle’s Constant used in the calculations.
Powell and the rest of the Fed board of governers debased the heck out of the dollar, enabled congress and the administrations to amass a ton more debt, and fueled a disastrous housing price explosion across the land through their interest rate repression so isnt it ironic that he’s complaining about something that his central bank actions likely contributed to.
Always more interesting to see Mish ‘stabs’ than the consensus reports. Mish clearly explains his logic unlike the consensus.