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The Econoday consensus expected the trade deficit to shrink to $-71.3 billion.

Instead, the Census Bureau Advance Trade Report shows the deficit rose to $-74.4 billion with December revised to $-72.3 billion.

In January, exports declined 2.2%. Exports of goods for January were $133.9 billion, $3.1 billion less than December exports.

Imports declined only 0.5%. Imports of goods for January were $208.3 billion, $0.9 billion less than December imports.

These reports will take a toll out of GDP estimates for the first quarter.

Trump Will Howl

The trade hawks in the administration will howl over today's reports.

However, the deficit is poised to get worse, much worse.

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Trump is Clueless About Trade

Trump does not understand trade deficits. The "art of the deal" cannot work when you don't understand essential points.

Trump's tax cut will increase the deficit and deficit spending ensures the trade imbalance will grow. Economists have not figured this out.

Mathematically, tariffs cannot possibly help. They can only make matters worse.

To understand the math, please see Trump's Tariffs Show He's "Clueless About Trade".

Also consider Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?

A huge mistake is in the works: Trump is Set to Promote Trade Hawk Peter Navarro.

Trump's trade policies are set to exacerbate the next global recession. Few see it coming.

Mike "Mish" Shedlock