Trade Deficit Declines by -5.1% for September 2012

The U.S. September 2012 monthly trade deficit declined by -5.1%, or -$2.25 billion. August's trade deficit was revised down by -$427 million, which gives a 3.1% monthly increase instead of the originally reported 4.1%. While the press touts the lowest monthly trade deficit since December 2010, the reality is September gives the second largest China trade deficit in history.

Trade Deficit Increased 4.1% in August 2012

The U.S. August 2012 monthly trade deficit increased 4.1%, or $1.75 billion. July's trade deficit was revised upward by $462 million, which gives a 1.4% monthly increase for July's trade deficit instead of the reported no change. For August, exports decreased by -$1.91 billion, or -1.0%. Imports declined by -$845 million, or -0.4%.


Bad News for Economic Growth as Q2 2012 GDP is Revised Down to 1.25%

Q2 2012 real GDP now shows 1.25% annualized growth after revisions. The advance second quarter GDP estimate was 1.5%, whereas the second revision reported 1.7% GDP growth. The BEA rounds their final GDP numbers, so the actual GDP reported was 1.3%. When we're grabbing economic crumbs, 0.05 percentage points makes a difference.



What the Q2 GDP third estimate shows is a barely breathing economy. Businesses shed inventories, consumers spent way less, a dramatic swing from the Q2 GDP advance report and investment generally is down from the 1st quarter. Shedding inventories can be a recession indicator. Durable goods spending literally vanished in Q2, also a recession indicator. The drought showed up in Q2 GDP, negatively impacting farm inventories and potentially other GDP components indirectly.

Nation's Current Account Deficit Declines by 12.1% for Q2 2012

The U.S. international transactions release is an odd duck. The current account is kind of like an economic income statement of the U.S. vs. the rest of the world. The current account deficit was $117.4 billion for Q2 2012, a 12.1% decline from Q1's current account deficit of $133.6 billion.


Trade Deficit No Change, Increased 0.25% for July 2012

The U.S. July 2012 monthly trade deficit was essentially unchanged, and increased 0.25%, or $103 million, from June to $42.002 billion. Exports decreased $1.81 billion, or -0.98%. Imports declined $1.81 billion, or -0.80%. June's trade deficit was revised from $42.924 billion to $41.899 billion.