US: Trade balance widened in December - Nomura

Analysts at Nomura note that the US trade deficit widened to $53.1bn in December from $50.4bn in November, which is a wider trade gap than both Nomura’s and consensus expectations (Nomura: $51.2bn deficit, consensus: $52.1bn deficit).

Key Quotes

“Goods exports increased 2.5% mo-m, modestly weaker than the advance estimate by the Census Bureau, while goods imports rose strongly by 2.9% and outpaced the growth in goods exports. Exports of services rose 0.2% m-o-m, with a firm 0.6% increase in services imports.”

“GDP tracking update: Relative to what the BEA had assumed, the December trade balance indicates that both exports and imports fell short of the BEA’s expectations with a muted impact on net exports. As a result, our Q4 GDP tracking estimate remains unchanged at 2.5% q-o-q saar. However, the monthly profile of service imports suggests a higher jumping off point for Q1, implying a higher quarterly imports growth in Q1 and thus, more drag from net exports than our previous estimate. Consequently, we lowered our Q1 GDP tracking estimate 0.1pp to 2.4%.”