James Knightley, chief international economist at ING, notes that the US trade balance has improved in January to -$51.1 billion from a deficit of $59.9 billion in December.
Key Quotes
“This is also better than the -$57.0 billion figure the market had expected and was largely due to a 2.6% month on month drop in imports while exports increased 0.9%MoM.”
“We suspect we may see a further decline in the trade deficit in February for the same reasons, which should be supportive for 1Q GDP growth – we continue to look for a figure of 1.5-2% annualised GDP growth, despite the current bout of market pessimism on the US economic outlook. However, this improvement in the trade position may only be temporary as US business reverts back to more ‘usual’ import practices in 2Q.”
“The US current account balance for 4Q18 will be released shortly and is likely to have widened to around $130 billion due primarily to the deterioration in the trade balance through 2H18. As a proportion of GDP, it’s likely to hold at around 2.3% of GDP, which isn’t bad relative to recent history.”
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