The second read on the inflation-adjusted first quarter gross domestic product (GDP) revealed that the slight growth slowdown (from a 2.30 percent annualized increase to 2.16 percent) was driven by a higher trade deficit figure ($650.9 billion annualized) than initially reported ($645.9 billion annualized). This figure – though still lower than the fourth quarter’s $653.9 billion – remained the second highest price-adjusted quarterly trade shortfall since the $703.2 billion total reported for the third qurter of 2007 – just before the onset of the Great Recession.
The quarterly records for all major import and export figures remained intact in the new data, but all of the latest export totals came in slightly lower, and all of the latest import figures came in slightly higher. At the same time, the sequential slowdowns in the growth of total imports and goods imports (79.17 percent and 86.21 percent, respectively) remained the greatest since the first quarter of 2011 and the first quarter of 2009, respectively. The latter date came at the depths of the Great Recession.
The new GDP figures showed that trade’s drag on cumulative growth during the current recovery remained substantial – and the first quarter total (9.41 percent) was slightly higher than the initially reported 9.23 percent. As a result, though, this trade drag was down somewhat from the 9.82 percent it hit as of the fourth quarter of last year. But the subtraction from cumulative constant dollar economic growth was still an impressive $535.09 billion.
Here are the trade highlights from this morning’s second report on first quarter GDP growth from the Commerce Department:
>The Commerce Department’s second read on gross domestic product (GDP) in the first quarter of this year revealed that a higher quarterly inflation-adjusted trade deficit than initially estimated helped bring about the slightly lower growth figure contained in the new report.
>The increase in the quarterly trade deficit estimate (from $645.9 billion annualized to $650.9 billion annualized) contributed to the real quarterly growth estimate being reduced from 2.30 percent to 2.16 percent.
>The first quarter figure was lower than the fourth quarter’s $653.9 billion. But it still represented the second highest such trade shortfall since the $703.2 billion reported in the third quarter of 2007 – just before the Great Recession struck.
>Because of this quarterly decline in the after-inflation trade deficit, trade still added to constant dollar economic growth in the first quarter. But the contribution fell from a 0.20 percentage point contribution to 2.30 percent annualized growth to a 0.08 percentage point contribution to 2.16 percent annualized growth.
>Levels of all major categories of real American exports and imports remained at record levels in the latest GDP data. But all of the export figures came in slightly lower than initially reported, and all the import figures came in higher.
> Real total exports are now judged to have been $2.2529 trillion in the first quarter on an annualized basis, not $2.2563 trillion. As a result, the sequential increase on an annualized basis was 1.04 [ercent, not 1.19 percent.
>The new real total export total nonetheless remained the category’s fifth straight quarterly record.
>Real goods exports are now judged to have been $1.5696 trillion in the first quarter on a annualized basis, not $1.5722 trillion. As a result, the annualized sequential increase was 1.32 percent, not 1.49 percent.
>But this too was a fifth straight quarterly record.
>Real services exports are now judged to have been $687.4 billion annualized in the first quarter, not the $688.3 billion previously reported. As a result, the annualized sequential increase was 0.47 percent, not 0.60 percent. The new total, however, was a new record as well.
>The first quarter’s total real import figure has now been revised up from $2.9022 trillion on an annualized basis to $2.9038 trillion. As a result, the sequential increase is now 0.70 percent, not 0.64 percent. The new total is still a second straight quarterly record.
>The goods imports total is now estimated at $2.3993 trillion annualized, up from $2.3985 trillion. annualized represented this category’s second straight all-time quarterly high. As a result, the sequential growth is 0.56 percent, not the 0.52 percent previously reported, but the level is still a second straight quarterly record, too.
>Real services imports for the first quarter are now estimated at $502.9 billion annualized, not the $502.1 billion previously reported. As a result, their sequential growth is now 1.35 percent, not the 1.19 percent previously reported. But this new total is a record, too.
>At the same time, both the total imports and the goods imports growth rates still represent the biggest sequential slowdowns in years.
>Even the slightly higher inflation-adjusted total import growth reported for the first quarter (0.70 percent) was 79.17 percent lower than the fourth quarter’s 3.36 percent. That’s still the biggest such change since the first quarter of 2011 (81.87 percent).
>The slightly higher inflation-adjusted goods import growth reported for the first quarter (0.56 percent) was 86.21 percent lower than the fourth quarter’s 4.06 percent. That’s still the biggest such change since the first quarter of 2009 (87.63 percent) – near the low point of the Great Recession.
>With the modest increase between the initially reported first quarter annualized real trade deficit and today’s figure, trade’s drag on the current economic recovery became even larger.
>As of the latest data, the increase in the after-inflation trade deficit has reduced total real growth since the recovery’s onset in mid-2009 by 9.41 percent, or $284.6 billion. The initial first quarter read produced a figure of 9.23 percent, or $279.6 billion.
>Yet this growth drag is still a bit less than the fourth quarter’s 9.82 percent (or 287.6 billion.
>The growth drag of the increase in the Made in Washington trade deficit – which focuses on the non-oil goods trade flows most heavily influenced by trade agreements and other trade policies – has been much greater during the recovery.
>As of the first quarter, this Made in Washington recovery drag stood at 18.26 percent of cumulative real recovery growth ($535.09 billion). That’s a small improvement over its drag as of the fourth quarter of last year – 18.38 percent of cumulative recovery growth, or $538.81 billion.