In October, the US trade deficit narrowed sharply, while only a slight decline was expected. The deficit shrank from a revised $44.6 billion to $38.7 billion, while a shortage of $43.8B billion was expected.
The details show that exports rose sharply (by 3.2% M/M), while imports fell slightly (by 0.5% M/M). Excluding transportation, the trade deficit dropped from $22.9B to $19.6B. In the second and third quarter, net-exports posted a big drag on US GDP growth, but this figure, also the real trade deficit was much smaller, is an encouraging sign that net-exports might post a (significant) positive contribution to GDP in the fourth quarter.
In December, University of Michigan consumer confidence improved further, after already a significant increase in November. According to the preliminary estimate, the headline index rose from 71.6 to 74.2, while the consensus was looking for only a slight increase (to 72.5).
The details show that both economic conditions (85.7 from 82.1) and the economic outlook (66.8 from 64.8) improved despite the weak payrolls report.
Content provided by: KBC Bank