by Calculated Risk on 4/29/2005 06:35:00 PM

Reviewing the first quarter 2005 (advance) GDP report, the first unusual item was inventories. Kash covered inventories in "Changes in Inventories".

Trade

UPDATE: All numbers are seasonally adjusted from the advance GDP report and the Trade report. So these numbers are correct. However, my calculation of $4.5 Billion in additional oil imports is not seasonally adjusted (I noted this in my previous post) so this might be a little less after adjustment.

But another area for concern is the balance of trade. The following table includes the reported trade balance, export and imports, for January and February and the projected numbers for March according to the GDP report.

Monthly Trade Balance (Billions)

	Trade	Exports	Imports
	Balance
January	-$58.5	$100.4	$158.9
February	-$61.0	$100.5	$161.5
March (est. from GDP)	-$59.9	$110.3	$170.1
Q1 TOTAL	-$179.4	$311.2	$490.6

Numbers rounded, might not add.

We already know the dollar value of oil imports surged in March, probably adding another $4.5 Billion to imports. Therefore imports of $170 Billion is very possible. But why does the BEA expect exports to surge? The global slowdown is impacting other countries more than the US, so we might expect exports to be flat.

I expect the March trade deficit (due May 11) to be worse than the BEA estimate and to negatively impact GDP (preliminary) due on May 26th. Other factors may lead to a positive GDP revision.