Today’s final (for now) revision of the third quarter GDP figures show that the increase in estimated growth from the second revision’s 3.90 percent on a real annualized basis to 5.00 percent stemmed entirely from domestic developments. The trade deficit for the quarter was pegged at $431.4 billion annualized – slightly higher than the $431.0 billion in the second estimate, as both inflation-adjusted imports and exports were revised down marginally (though the latter remained at a new quarterly record). The final third quarter figure still shows that trade’s recovery role changed from a subtraction in the second quarter to a contribution in the third. But overall, trade flows have slowed the recovery by nearly 3.40 percent, and President Obama’s export doubling goal receded even further into fantasy land.
Here are the trade highlights from this morning’s GDP report:
>The final revision to third quarter GDP figures show that the major speed-up in growth reported in compared with the last set of changes took place despite the nation’s trade performance.
>Although this morning’s new Commerce Department report revised annualized third quarter real growth up from 3.90 percent to 5.00 percent on an annualized basis, it also showed that the trade deficit actually worsened a bit – from $431.00 billion to $431.40 billion annualized.
>This final trade deficit figure is nonetheless better than the $460.40 billion reported for the second quarter, and means that rather than slowing sequential growth by 7.39 percent, as in the second quarter, American trade flows generated 15.60 percent of the third quarter’s inflation-adjusted expansion. (The previous third quarter revision tabbed the trade contribution to the lower growth level at 20.00 percent.)
>As in every period during which trade adds to real growth, it achieves this goal without a single dollar of new budget deficit-boosting tax cuts or spending hikes. Indeed, since nearly all of this debt-free growth comes from the private sector, trade-generated growth strengthens American finances by increasing the nation’s level of taxable activity and thus reducing the national debt.
>These better U.S. trade flows, however, are completely unrelated to American trade deals and other trade policies. Instead, they stem entirely from the turnaround in U.S. energy trade.
>According to the U.S. Census Bureau’s separate monthly trade figures, from the recovery’s beginning in mid-2009 through this past September, the real U.S. oil trade deficit is down by nearly 50 percent on a monthly basis – from $16.62 billion to $8.56 billion. Yet during this period, the non-oil goods deficit – which is heavily influenced by U.S. trade policy – has more than doubled on a monthly basis, from $20.05 billion to $48.40 billion in September. That’s only slightly below the all-time high of $49.09 billion in May.
>Even including the gains from the energy revolution, U.S. trade flows have subtracted 3.40 percent from real U.S. growth since the recovery’s onset.
>Real U.S. exports for the third quarter were revised down for the second time this morning, but the new $2.1040 billion annualized figure is still a quarterly record. The previous estimate was $2.1057 billion.
>These exports are now 1.12 percent higher than the second quarter’s level, not the 1.90 percent initially reported for the third quarter.
>U.S. real exports, moreover, are up only 37.04 percent since the first quarter of 2009. As a result, they remain way short of President Obama’s commitment to double them by the end of 2014 – with only one data quarter left to achieve this goal.
>The new GDP figures pared third quarter GDP real import levels down from $2.5367 billion in the second estimate to $2.5353 billion – still just below the second quarter’s record annualized level of $2.5411 billion. Imports therefore fell sequentially by 0.23 percent in the third quarter, not the 0.43 percent first reported.