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On Friday we cited several pieces of evidence that Q4 was already coming in stronger than what the doomsayers — some of whom are predicting 0% GDP growth — are seeing.Notably good: Both October ISMs and the October jobs report.
There’s another factor that’s going to boost Q4 GDP: The weak dollar.
(Remember, net imports hurt GDP, so anything that decreases imports and increases exports is a GDP positive).
And while everyone wrings their hands about the horror of the weak dollar, and Bernanke’s “debasement,” this is beginning to work against the bears.
The gap shrank to $45 billion from $46.3 billion the prior month, according to the median of 57 estimates in a Bloomberg News survey ahead of Commerce Department figures Nov. 10. Another report may show consumer confidence climbed in November.
A flagging dollar that is making American goods cheaper overseas and a growing global economy mean manufacturers like Cummins Inc. will see international sales climb. Foreign products, in turn, are becoming more expensive for U.S. buyers, signaling the trade deficit will keep decreasing and contribute to the recovery for the first time in a year.