U.S. April Advance Goods Trade - Positive for Q2 GDP, but inventories may provide some offset
April’s advance US trade deficit of $82.4bn is narrower than expected and down from $$85.3bn in March. Exports rose by 4.0% while imports rose by 1.9%. Earlier price data had shown gains of 3.3% for exports and 1.9% for imports.
The exports gain was led by surges of 7.8% in consumer goods and 7.5% for capital goods. Negatives were seen from autos at -2.8% and food at -0.3%. The imports gain was led by capital goods at 5.6% and other goods at 7.5%. Negatives were seen from industrial supplies at -1.9%, autos at -1.5% and consumer goods at -1.0%. Oil comes in industrial supplies so with prices up volumes in that sector look weak. Exports for industrial supplies rise by 2.1%.
The trade data suggesting a modest rise in real imports while real imports are near flat is supportive for Q2 GDP. Also released are advance wholesale and retail inventory data for April, with gains of 0.5% for wholesale, down from 1.5% in March, and 0.7% fir retail, matching March’s gain. Wholesale shows a 0.9% rise in durables and a 0.2% fall in non-durables, the latter hinting at depletion in gasoline. Retail was led by a 0.9% rise in autos, also hinting at some depletion in gasoline. Inventories are probably quite subdued in real terms, providing some offset to the positive GDP signal from the trade data.
