US Q4 GDP tracking 1.6% after advance November trade report

The nominal monthly trade deficit narrowed moderately in November, to $60.5bn, from the revised $61.3bn deficit in October, according to the Census Bureau's advance report on international trade in goods. The deficit was narrower than the forecast ($62.0bn) and in line with consensus expectations ($60.7bn). In terms of exports, nominal goods declined 2.0% m/m (previous: -2.4%), with decline across all end-use categories. The "other" goods category fell 15.6% on the month, retracing last month's outsized gain.

Consumer goods (-1.9% m/m, previous: -3.0%), automotive goods (-1.7% m/m, previous: -1.3%), and industrial supplies (-2.7% m/m, previous: -4.6%) exports declined the most in November, as the prices for these categories all fell. Capital goods (-0.2% m/m, previous: -2.0%) and food and beverages (-0.2% m/m, previous: -5.5%) had more modest declines.

Imports fell 1.8% m/m (previous: -0.6%) in nominal terms. Food and beverages (0.8% m/m, previous: -4.0%) and automotive (0.2% m/m, previous: 1.0%) rose on the month; all other categories decreased. Consumer goods imports fell a sizable 6.0% (previous: 0.5%). Capital goods (-0.8% m/m, previous: 1.1%) and industrial supplies (-1.3% m/m, previous: -5.3%) had modest declines.

"Alongside trade prices already reported by the BLS for November, the data suggest that the real goods deficit narrowed slightly on the month, against our expectations of a modest widening. This implies a smaller drag from net trade in Q4 and a modest boost to GDP growth. This effect was partially offset by better-than-expected net exports of capital goods that trimmed our estimate of equipment investment. Overall, our Q4 GDP tracking estimate rose one-tenth, to 1.6%, says Barclays.