Preview: Due April 29 - U.S. March Advance Goods Trade Balance - February exports gain less sustainable that that of imports
Trade data has been volatile recently and advance goods data could have an impact on Q1 GDP expectations, with GDP data due on April 30. We expect a deficit of $87.8bn, up from $83.5bn in February and $80.9bn in January.
The Q1 deficit would then average $84.1bn, compared with $79.8bn in Q4, but still below where trend was before tariff policy increased the volatility of the series, marginally below $100bn per month. We expect exports to fall by 3.5% after a 5.9% February increase and imports to fall by 1.0% after a 5.1% February increase. This will be despite export prices increasing by more than imports prices.
Recent trade volatility has been heavily influenced by a small number of components, with most of February’s exports gain coming in nonmonetary gold. February’s imports gain was led by computers. Both look due for corrections but the strength of nonmonetary gold exports looks less sustainable than that of computer imports. Still there is high uncertainty with there being no guarantee that a return to underlying trend will come as soon as this month.
Also due with the advance goods trade report will be advance estimates for March retail and wholesale inventories, which could also have an impact on Q1 GDP expectations.