The government’s second estimate of first quarter, 2016 gross domestic product (GDP) showed that a smaller real trade deficit ($561.2 billion) than reported in the advance figures ($566.6 billion). But the total still represented the biggest inflation-adjusted shortfall since the first quarter of 2008. As a result, trade’s bite from inflation-adjusted growth fell from 0.34 percentage points from feeble 0.54 percent annualized real growth to 0.21 percentage points from slightly stronger 0.84 percent growth – but was nonetheless bigger than in the fourth quarter.

Moreover, the trade drag on the economy’s first quarter performance was still the greatest after the drop in gross private investment (0.45 percentage points). The new first quarter numbers mean that trade has now slowed cumulative growth during this already sluggish U.S. recovery by 9.07 percent – despite the dramatic drop in the country’s oil trade shortfall. This figure was down from the advance report’s 9.37 percent, but up from the fourth quarter’s 8.78 percent.

The new GDP figures also showed show that real total imports fell slightly from the fourth quarter’s levels rather than having risen slightly, and that real services imports inched up a bit more to achieve their sixth consecutive quarterly record.

Here are the trade highlights from yesterday morning’s GDP report:

>The U.S. government’s second official look at economic growth in the first quarter of 2016 showed that trade dragged on expansion a bit less than initially reported last month, but had still undercut the sluggish recovery more than in the fourth quarter of last year.

>The combined goods and services trade deficit for the quarter was revised down from $566.6 billion on an annualized basis after inflation to $561.2 billion. This level still represented both an increase from the fourth quarter level of $551.9 billion and the highest figure in absolute terms since the first quarter of 2008, as the Great Recession was starting to unfold.

>As a result, inflation-adjusted trade subtracted 0.21 percentage points from the first quarter’s new annualized real increase in the gross domestic product (GDP) of 0.84 percent. That’s down from the first estimate of trade cutting 0.34 percentage points from 0.54 percent real annualized growth

>In the fourth quarter, trade subtracted 0.14 percentage points from 1.38 percent annualized after-inflation growth.

>According to the new first quarter figures, the growth of the real trade deficit has cut cumulative constant-dollar U.S. growth during the current, historically weak economic recovery (which began in the second quarter of 2009) by 9.07 percent. That’s better than the 9.37 percent growth drag calculable from the previous set of GDP figures, but up from the 8.78 percent subtraction as of the fourth quarter.

>Yet the bite from growth from trade flows impacted most heavily by trade deals and other policies is likely to be much greater.

>According to the latest monthly U.S. trade data, issued separately by the Census Bureau, through the first quarter of this year, this after-inflation non-oil goods deficit has reduced cumulative recovery-era real growth by 20.13 percent. As of the fourth quarter last year, the toll was 19.76 percent.

>The new GDP data show that, although they dropped less (0.51 percent as opposed to 0.64 percent) sequentially, lower combined goods and services exports were still the biggest contributor to the real trade deficit’s increase in the first quarter.

>These exports are still down sequentially for two straight quarters, and at $2.0995 trillion annualized, they stand 1.15 percent below their absolute peak of $2.1239 trillion annualized, achieved in the fourth quarter of 2014.

>Real annualized total imports edged down by 0.06 percent in the first quarter (from $2.6622 trillion annualized to $2.6606 trillion), whereas the initial first quarter estimates reported them rising by 0.04 percent. They still stand only 0.25 percent below their absolute peak of $2.6672 trillion annualized, reached in the third quarter of last year.

>As for real annualized goods exports, they fell sequentially by less in the first quarter (0.66 percent) than originally reported (0.86 percent). The new $1.4195 trillion annualized total, however, is still the lowest since the first quarter of 2014, and these exports remain 3.72 percent below their peak of $1.4743 trillion, set in the fourth quarter of that year.

>Real goods exports, moreover, are still down sequentially for three straight quarters.

>By contrast, real annualized goods imports decreased more sequentially (by 0.29 percent) in the first quarter than reported last month (0.16 percent). They now stand at $2.1724 trillion on an annualized basis after this second straight quarter-to-quarter drop, and are now 0.62 percent below their peak level of $2.1860 trillion, set in the third quarter of last year.

>The new GDP revisions left the real annualized services export estimates unchanged. These fell sequentially for the first time since the third quarter of 2014, a decrease of 0.24 percent from the fourth quarter’s record $678.9 billion to $677.3 billion.

>The real services imports level, however, was revised slightly higher. And even though the increase was only from $486.2 billion annualized to $486.3 billion, they represented the sixth straight record quarterly total.

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