Tags

, , , , , , , , , , , ,

The government’s release of revised figures for second quarter 2016 gross domestic product (GDP) revealed a higher constant dollar trade deficit than initially judged ($562 billion versus $556.3 billion) and a smaller absolute and relative trade contribution to annualized growth (0.10 percentage points to 1.09 percent expansion versus 0.23 percentage points to a 1.21 percent increase). The second quarter real trade deficit remained the third largest largest quarterly result ($562 billion) since the first quarter of 2008 ($623.7 billion) – just after the start of the Great Recession.

As a result, trade’s cumulative drag on the economic recovery hit 8.84 percent of total real growth, with the toll taken by the Made in Washington (real non-oil goods deficit) at 19.70 percent – or $437 billion after inflation. Total real exports were still higher than in the first quarter but dipped from the previous second quarter estimate. Total real imports were up on both scores, and hit their second highest total ever: $2.6701 trillion annualized. Real services imports also declined slightly from the first estimate, but still represented a new record of $473.6 billion annualized.

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

>The U.S. government’s second official look at inflation-adjusted economic growth in the second quarter of 2016 revealed that a higher-than-previously reported real trade deficit ($562 billion versus $556.3 billion) – boosted growth considerably less than initially estimated.

>The previous second quarter GDP report pegged trade’s growth contribution at 0.23 percentage points out of 1.21 percent annualized expansion after inflation – the highest such total since the fourth quarter of 2013.

>According to the new figures, however, this growth contribution was only 0.10 percentage points out of a 1.09 percent annualized expansion in constant dollars.

>The new second quarter trade deficit, although down from the final first quarter figure of $566.3 billion, was still the third highest total since the $627.3 billion recorded for the first quarter of 2008 – right after the start of the Great Recession.

>The new GDP figures took the toll exacted by rising real trade deficits during the current economic recovery to a cumulative 8.84 percent – which translates into $195 billion in lost after-inflation growth.

> Data kept separately by the U.S. Census Bureau show that the growth toll exacted by the Made in Washington trade deficit as of the second quarter has been much higher – $437 billion after inflation. In other words, real growth during the current economic recovery has been 19.70 percent lower in toto simply because this inflation-adjusted trade gap – in the non-oil goods flows heavily affected by trade agreements and similar trade policies – has risen so dramatically.

> Today’s GDP revision pegs combined real goods and services exports at $2.1081 trillion annualized. That’s 0.05 percent lower than the previous estimate of $2.1092 trillion, but 0.34 percent higher than the first quarter total. The new second quarter total is 2.05 percent lower than the all-time high for total real exports – the fourth quarter 2014’s $2.1523 trillion.

>The new combined real imports figure is a new record: $2.6701 trillion annualized. This new record eclipsed the previous high – set in the first quarter – of $2.6682 trillion by 0.07 percent. It was also 0.17 percent higher than the initial second quarter figure of $2.6655 trillion.

>The real goods export total reported today – $1.4303 trillion annualized – was – 0.22 percent lower than the first second quarter figure of $1.4335 trillion, but topped the final first quarter number of $1.4241 trillion by 0.44 percent.

>Real goods exports also peaked in the fourth quarter of 2014, at $1.4745 trillion annualized – three percent higher than the latest figure.

>The real goods imports numbers reported today ($2.1943 trillion annualized) topped those both in the previous second quarter estimate ($2.1894 trillion, for a 0.22 percent rise) and for the first quarter ($2.1941 trillion – a fractional increase).

>Second quarter real services exports of $677.4 billion annualized were 0.25 percent higher than the previous estimate of $675.7 billion, but barely nosed out the $677.3 billion mark of the first quarter. At the same time, they fell 0.97 percent short of the record ($684 billion) set in the first quarter of 2015.

>The new real services import total for the second quarter ($473.6 billion annualized) was fractionally lower than the $473.7 billion estimated in the initial report. But it still represented a new record, beating the previous all-time high ($471.9 billion), set in the first quarter of this year, by 0.36 percent.

Advertisements