This morning we got the news that theU.S. trade deficit has shrunk to its lowest level since October 2009.
Oil imports fell 1.9%, helping the deficit shrink to $US34.3 billion (economists were looking for the deficit to come in at $US40 billion).
Now some of Wall Street’s top analysts are revising their fourth quarter GDP predictions on the news.
“We revised up our Q4 GDP tracking forecast to 3.0% from 2.3% following November international trade data,” Credit Suisse’s Neal Soss wrote clients. “The quarter-to-date real goods deficit is tracking -$35bn (annual rate) narrower than the Q3 average, implying a significant net export contribution to fourth quarter growth.”
Joseph LaVorgna of Deutsche Bank pushed his shop’s Q4 GDP call to 4.0% after the report. High Frequency Economics’ Jim O’Sullivan wrote clients, “As of now our our 2.5% estimate for 4Q real GDP growth looks too low.”
“The November trade data would suggest Q4 GDP growth is likely stronger than we expected,” GMP Securities’ Adrian Miller wrote. “Indeed, while we have previous forecasted a 2.0% Q4 growth rate following Q3’s +4.1%, the trade data, unless offset in December could lift Q4 growth by 30bp to 40bp. Hence we are revising our Q4 estimate to 2.3%.”
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