Trade Gap in U.S. Probably Shrank on Fewer Imports

Photographer: Paul Taggart/Bloomberg

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Photographer: Paul Taggart/Bloomberg

Shipping containers sit stacked at the Port of New Orleans.

The trade deficit in the U.S. probably retreated in February as imports cooled from a record, economists said before a report today.

The gap shrank to $51.8 billion from $52.6 billion in January, according to the median of 73 estimates in a Bloomberg News survey. It would be the largest back-to-back readings since late 2008. Other reports may show wholesale prices climbed at a slower pace and claims for jobless benefits were little changed.

Demand for foreign-made goods may remain elevated this year as an improved labor market underpins consumer spending. At the same time, sales overseas by American companies may moderate as parts of Europe stagnate and China slows, a sign international commerce will fail to be a source of strength for the world’s largest economy.

“It doesn’t look like trade is going to be a big plus to growth this year,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

The Commerce Department’s trade figures are due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from gaps of $46.5 billion to $54.1 billion. January’s shortfall was the biggest since October 2008.

The U.S. economy picked up heading into 2012 as the euro area faces a potential recession and China restrains its economy to stem inflation. The U.S. expanded at a 3 percent annual rate in the fourth quarter after a 1.8 percent gain in the prior three months.

Growth in China

The Chinese economy grew 8.9 percent in the last three months of 2011 from the same period a year ealier, the slowest pace for 10 quarters. The government last month lowered this year’s economic growth target to 7.5 percent, after keeping the goal at 8 percent over the past seven years.

The 17-nation euro economy will shrink 0.3 percent this year, according to the European Commission, which projects contractions in Italy, Spain, Belgium, Greece, Cyprus, the Netherlands, Portugal and Slovenia. By contrast, Germany’s economy is forecast to expand 0.6 percent.

“With the U.S. holding up better than the rest of the world,” exports are expected to slow this year, Gault said. “It’s a consequence of the U.S. economy performing better than others.”

Signs the American economy is improving have helped boost shares. The Standard & Poor’s 500 Index has climbed 8.8 percent so far this year through yesterday.

‘Challenging’ Environment

“Our business continues to be impacted by the challenging global economic environment,” Blake Jorgensen, chief financial officer of Levi Strauss & Co., said in an April 10 conference call with analysts. “All of Europe is in an economic doldrums in many ways. As you probably saw with China and India during the quarter, we’ve seen some slowing of the rapid growth there, and we’re seeing that show up as well in some of the consumer spending patterns of our consumer base in our stores.”

Revenue at Levi Strauss grew in the Americas and Asia Pacific region, while declining in Europe, he said.

A rise in oil costs in March is one reason why economists say imports probably rebounded last month from the February lull. A barrel of crude on the New York Mercantile Exchange averaged $106.20 in March, compared with $102.26 the previous month. The cost retreated to $101.02 on April 10.

The U.S. dollar has declined 1 percent this year through last week against a trade-weighted basket of currencies from the country’s biggest trading partners. The decrease makes American goods less expensive to foreign buyers, helping to offset a slowdown in demand.

Another report today may show applications for jobless benefits fell to a four-year low last week. Claims dropped to 355,000 from 357,000 the previous week, economists said ahead of Labor Department figures due at 8:30 a.m. in Washington.

A report at the same time may show wholesale prices rose 0.3 percent in March, compared with a 0.4 percent increase the previous month, according to the Bloomberg survey median.


                        Bloomberg Survey

==============================================================
                           Initial    Trade      PPI     Core
                            Claims  Balance               PPI
                            ,000’s   $ Blns     MOM%     MOM%
==============================================================
Date of Release              04/12    04/12    04/12    04/12
Observation Period           7-Apr     Feb.    March    March
--------------------------------------------------------------
Median                         355    -51.8     0.3%     0.2%
Average                        358    -51.6     0.3%     0.2%
High Forecast                  372    -46.5     1.5%     0.4%
Low Forecast                   350    -54.1    -0.4%    -0.1%
Number of Participants          46       73       72       71
Previous                       357    -52.6     0.4%     0.2%
--------------------------------------------------------------
4CAST                          372    -50.0     0.6%     0.4%
ABN Amro                       355    -52.5     0.3%     0.2%
Action Economics               355    -51.0     0.7%     0.2%
Aletti Gestielle              ---     -51.5     ---      ---
Ameriprise Financial           355    -50.5     0.3%     0.2%
Banca Aletti                   360    -53.3     0.3%     0.2%
Bantleon Bank AG              ---      ---      0.2%     ---
Barclays Capital               355    -52.5     0.4%     0.2%
Bayerische Landesbank         ---     -53.0     ---      ---
BBVA                           350    -53.0     0.3%     0.2%
BMO Capital Markets            355    -52.6     0.5%     0.2%
BNP Paribas                    360    -51.4     0.3%     0.2%
BofA Merrill Lynch             355    -52.5     0.2%     0.1%
Briefing.com                   355    -53.0     0.8%     0.2%
Capital Economics             ---     -51.0     0.2%     0.2%
CIBC World Markets            ---     -53.5     0.3%     0.2%
Citi                           370    -53.5    -0.1%     0.2%
ClearView Economics           ---     -51.5     0.4%     0.2%
Comerica                      ---     -54.0     0.4%     0.2%
Commerzbank AG                ---     -51.0     0.0%     0.2%
Credit Agricole CIB           ---     -53.1     0.3%     0.2%
Credit Suisse                  365    -53.0     0.2%     0.3%
Daiwa Securities America      ---     -51.8     0.3%     0.2%
DekaBank                      ---     -52.0     ---      ---
Desjardins Group               355    -51.0     0.3%     0.2%
Deutsche Bank Securities      ---     -51.0    -0.4%     0.1%
Deutsche Postbank AG          ---     -51.5     0.4%     0.2%
Exane                         ---     -51.6     0.2%     0.2%
Fact & Opinion Economics       353    -53.5     0.3%     0.2%
First Trust Advisors           358    -48.7     0.4%     0.2%
FTN Financial                 ---      ---      0.3%     0.2%
Helaba                         350    -52.5     0.3%     0.2%
High Frequency Economics       370    -52.6     0.3%     0.2%
HSBC Markets                   361    -50.5     0.1%     0.2%
Hugh Johnson Advisors          350    -53.0     0.4%     0.2%
IDEAglobal                     350    -50.0     0.3%     0.2%
IHS Global Insight             355    -49.4    -0.2%     0.2%
Informa Global Markets        ---     -52.0     0.4%     0.3%
ING Financial Markets         ---     -53.0     0.3%     0.2%
Insight Economics              355    -50.0     0.4%     0.2%
Intesa Sanpaulo               ---     -51.0     0.2%     0.1%
J.P. Morgan Chase              360    -51.3    -0.1%     0.2%
Janney Montgomery Scott       ---     -51.0     0.3%    -0.1%
Jefferies & Co.                360     ---      0.3%     0.2%
Landesbank Berlin              360    -52.3     0.2%     0.1%
Landesbank BW                 ---     -53.0     ---      ---
Maria Fiorini Ramirez          365     ---      ---      0.2%
Market Securities             ---     -49.8     0.2%     0.2%
MET Capital Advisors          ---      ---      0.3%     ---
Mizuho Securities              355    -53.0     0.2%     0.1%
Moody’s Analytics              355    -53.5     0.3%     0.2%
Morgan Stanley & Co.          ---     -48.0    -0.4%     0.2%
National Bank Financial       ---     -51.0     0.3%     0.2%
Natixis                       ---     -51.3     0.3%     0.2%
Nomura Securities             ---     -52.0     0.3%     0.2%
Nord/LB                        355    -52.0     0.4%     0.2%
O’Sullivan                     360    -48.5    -0.1%     0.2%
Parthenon Group                362    -51.7     0.1%     0.2%
Pierpont Securities            360    -52.3    -0.1%     0.2%
PineBridge Investments         353    -49.0     0.2%     0.2%
PNC Bank                      ---     -53.5     0.4%     0.2%
Raiffeisenbank International  ---     -52.0     0.1%     0.3%
Raymond James                  350    -53.5     0.3%     0.2%
RBC Capital Markets            372    -52.5    -0.1%     0.2%
RBS Securities                 368    -49.5    -0.4%     0.2%
Scotia Capital                 360    -51.5     ---      ---
SMBC Nikko Securities         ---     -46.5     0.0%     0.2%
Societe Generale               372    -54.1     0.1%     0.3%
Standard & Poor’s              355    -51.0     0.7%     0.2%
Standard Chartered             355    -53.5     0.3%     0.2%
Stone & McCarthy Research      355    -51.5     0.3%     0.2%
TD Securities                  355    -53.0     0.4%     0.2%
UBS                            355    -48.5    -0.3%     0.2%
University of Maryland         355    -50.9     0.5%     0.2%
Wells Fargo & Co.             ---     -52.1     0.5%     0.2%
WestLB AG                     ---     -51.8     0.4%     0.2%
Westpac Banking Co.           ---     -53.0     1.5%     0.3%
Wrightson ICAP                 365    -48.5    -0.2%     0.2%
==============================================================

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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