Advance Indicators

This morning the Census bureau reported on Advance Economic Indicators for August

  • Advance International Trade in Goods: The international trade deficit was $82.9 billion in August, up $2.8 billion from $80.1 billion in July. Exports of goods for August were $118.3 billion, $3.2 billion more than July exports. Imports of goods for August were $201.3 billion, $6.0 billion more than July imports.
  • Advance Wholesale Inventories: Wholesale inventories for August, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $637.0 billion, up 0.5 percent (±0.2 percent) from July 2020, and were down 5.0 percent (±0.7 percent) from August 2019. The June 2020 to July 2020 percentage change was revised from down 0.3 percent (±0.2 percent) to down 0.1 percent (±0.2 percent).
  • Advance Retail Inventories: Retail inventories for August, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $599.7 billion, up 0.8 percent (±0.2 percent) from July 2020, and were down 10.1 percent (±0.5 percent) from August 2019. The June 2020 to July 2020 percentage change was unrevised from the preliminary estimate of up 1.2 percent (±0.2 percent).

Goods vs Econoday Consensus

The US goods deficit (census basis) is expected to deepen to a very large $82.6 billion in August versus $81.2 billion in July (revised from $79.3 billion). Goods imports were down 7.4 percent year-over-year in August and were down 0.9 percent relative to February; goods exports have been falling more steeply, down 15.7 percent on the year and down 16.4 percent versus February.

The deficit was a bit larger than expected but the economists got this one essentially correct.

Goods and Services 

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Trade Deficit in Goods and Services 2020-07

The advance report only covers goods. The above chart shows goods and services through July. 

Since the US generally runs a surplus in services, the net impact will be less than today's report of -82.9 billion.

However, the total deficit is sure to get worse. 

Promises Promises

Trump pledged to shrink the deficit. Instead it's heading towards the depths of the Bush and Obama years.

Also note that trade deficits tend to shrink in recessions. Instead, it widened.

Mish

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