By Kasra Kangarloo
WASHINGTON (MNI ) – The U.S. trade deficit for September is
expected to narrow from the previous month, and could provide a needed
boost to the subpar figure third quarter GDP.
According to a survey of economists by Market News International,
the September trade balance report is expected to show a deficit of
$45 billion, following the $46.5 billion deficit in August.
Rick MacDonald, economist at Action Economics, attributed the
narrowing in the deficit to a Chinese tax rebate on exported goods,
which had distorted trade figures in the summer months. He also added in
a telephone interview that “based on where the economy and consumption
are, a deficit between $42 and $46 billion seems appropriate.”
The greater than expected widening of the deficit in August was due
to a 2.1% increase in imports, concentrated almost entirely in the goods
sector. Imports from China and Mexico posted record highs on an
unadjusted basis, and the trade deficit with China was the highest ever,
rising $28 billion over the month.
Sean Incremona, economist at 4Cast Ltd., predicted an increase in
the deficit over the month, citing factory orders and ISM data. “Were
looking for imports to remain resilient, and a low increase in exports,”
he said in a telephone interview.
Factory orders rose by 2.1% in September, while the ISM index for
export orders was only 54.5, versus an index of 56.5 got imports orders.
The trade deficit deducted 2 percentage points from total GDP in
the third quarter, compared with a 3.5 percentage point deduction in the
second quarter. An unexpected drop in the deficit larger than already
assumed would boost the 2.0% increase in total GDP, as estimated by the
Commerce Department in the advance report.
The report for the U.S. September trade balance will be released
Wednesday, November 10 at 8:30 am EST by the Commerce Department.
— Kasra Kangarloo is a reporter for Need to Know News in Washington
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,M$U$$$]
