Smaller August Merchandise Trade Gap Boosts U.S. GDP Estimatesby
A smaller-than-projected merchandise trade deficit in August, along with a downward revision to the July gap, has prompted some analysts to raise their forecasts for U.S. economic growth in the third quarter.
The preliminary estimate of the goods trade gap came in at a four-month low of $58.4 billion in August, according to a Census Bureau report on Thursday. The median projection of economists called for $62.2 billion. In July, the merchandise deficit was revised down to $58.8 billion from $59.3 billion.
Economists at Morgan Stanley, Barclays Plc and Amherst Pierpont Securties LLC raised their third-quarter tracking estimates for gross domestic product after the figures. A drop in August wholesale inventories and a downward revision to July stockpiles, data that were included in the agency’s advance report, only partially offset the effects of a narrower trade deficit.
Stephen Stanley, chief economist at Amherst Pierpont in New York, said in a note that he increased his estimate of third-quarter growth to 3.7 percent from 3.5 percent, calling the deficit figure a “huge surprise.”
Ted Wieseman at Morgan Stanley boosted his projection to 3.7 percent from 2.9 percent, while Barclays economists Rob Martin and Blerina Uruci lifted theirs to 2.6 percent from 2.4 percent.
A separate report on Thursday showed that the government’s estimate of second-quarter economic growth was revised to a 1.4 percent annualized pace from a previous estimate of 1.1 percent. Net exports added 0.18 percentage point to growth from April through June.