Preview: Due May 29 - U.S. April Advance Goods Trade Balance - Third straight rise in deficit
We expect an advance April goods trade deficit of $90.0bn, up from $87.4bn in March and a third straight deterioration, though still well below December’s $98.5bn, which was similar to where trend was before changes in tariff policy brought increased volatility to the series.
We expect imports and exports to both increase by 3.0%, but with imports rising by more in USD terms. With April data showing exports prices up by 3.3%, this implies a marginal real decline in exports, but with import prices up by 1.9%, a moderate real increase in imports is implied.
Our main reason for looking for a decline in real exports is that nonmonetary gold exports remain at elevated levels and this is likely to fade, though timing of that is hard to predict with confidence. Boeing data suggests an increase in aircraft exports is likely. We see no special factors for imports.
A wider deficit in real terms will be negative for Q2 GDP. Advance retail and wholesale inventory data due with the release will also be watched for GDP implications.