US TRADE DEFICIT HITS HIGHEST LEVEL IN MONTHS

The U.S. trade deficit widened more than expected in September, to $US-41.8 billion, an increase of 8%.

It’s the largest deficit in four months. Imports reached their highest level since November 2012. The import average price per barrel of oil, at $US102, was the greatest since May 2012 (recall, however, that this data is two months old). Imports of cars and related parts reached a record.

Expectations were for a -$39.0 billion print, from a revised -$38.7 billion.

Analysts seem to be of two minds on the data.

But others are saying this is pointing to a downward revision in GDP.

“Looking at the assumptions the BEA made for trade when constructing the first estimate of third-quarter GDP, the statisticians were correct about imports, so that won’t be revised,” Capital Economics’ Paul Ashworth said. “However, they were too optimistic about goods exports. They assumed a 4.7% q/q annualisedgain when it actually came in at 2.4%. The upshot is that GDP growth should be revised down to about 2.5% in the second estimate, from the first estimate of 2.8%.”

Here’s the tale of the tape:

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