US Q3 GDP tracking 1.6% after advance August trade data

The Census Bureau's new report on international trade in goods for August showed a sharp widening in the nominal goods deficit. Nominal goods exports are estimated to have declined 3.5% m/m, while imports rose 1.8% m/m. Together, the nominal trade deficit in goods widened to $67.2bn August from $59.2bn in July.

These data, alongside the import and export price data already available from the BLS for August, suggest that real goods exports declined about 2% on the month and real goods imports were up nearly 3.5%. Nonautomotive consumer goods imports rose 7.8% in August, to more than make up for the July decline.

 At the same time, nonautomotive consumer good exports fell 3.5% and auto exports were down 6.4%. On balance, the advance August trade data are consistent with strong domestic consumption that is likely to be offset by a large drag from net exports in terms of its effect on GDP growth.

"Incorporating these data into our GDP tracking estimate, we now expect net trade to subtract 1.0pp from GDP growth in Q3. This cut our Q3 GDP tracking estimate eight-tenths, to 1.6%", says Barclays.