U.S. goods trade deficit widens in September

The U.S. goods trade deficit widened modestly in in September to USD 64.1 billion from August’s deficit of USD 62.9 billion. This was consistent with consensus estimate. Exports were up 0.6 percent sequentially, following a strong rise of 1.4 percent in August. Exports continue to reflect strong growth outside the U.S. and a modestly weaker dollar, noted Barclays in a research report. Nominal export growth had peaked in January at 8 percent and has decelerated to 3.1 percent year-on-year through September.

Notwithstanding this slowing, the export data is viewed as consistent with the synchronized global growth backdrop. Elsewhere, nominal imports rose 1 percent sequentially after falling modestly for four consecutive months. Imports of both capital goods and consumer goods were sharply up, with the former rising 2.3 percent sequentially and the latter rising 0.5 percent.

Capital goods imports continued to rise sharply, rising 13.4 percent year-on-year and reflecting a more buoyant business spending environment. Business spending is responding to many sources of improvement, including the stabilization of the industrial side of the economy.

“Even though the trade deficit widened more than we expected and led to a modestly lower Q3 tracking estimate (see below), we see the strength in capital and consumer goods imports as reflective of a healthy underlying pace of economic activity”, stated Barclays.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 126.828. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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