The U.S. advance indicators report
The U.S. advance indicators report sharply undershot estimates thanks to surprisingly weak exports, as the Q3 lift to food exports from soybeans was fully reversed in October. Analysts also saw downside retail and wholesale inventory surprises. For October trade in goods, the advance goods deficit widened to $61.9 B from a $56.5 B September figure with a 2.8% October plunge for goods exports alongside a 1.3% bounce for imports. The advance goods data implies an October rise in the goods and services trade deficit to $42.2 B from $36.4 B in September. For inventories, a 0.4% October wholesale inventory drop followed a -0.1% (was 0.1%) September figure, alongside the same 0.4% drop for retailers with a 0.3% ex-auto decline that followed respective September figures of zero (0.2%) and -0.1% (was zero). An estimated 0.2% factory inventory rise implies a 0.2% October business inventory decline. Analysts no longer expect a headline revision in the 2.9% Q3 GDP growth rate, as a $1 B boost in net exports and $6 B boosts in both consumption and construction are almost fully offset by a big $12 B downward revision in inventories. Analysts now expect 1.8% (was 2.2%) growth for Q4 GDP with a $15 (was $4) B net export subtraction after a $36.6 (was $35.6) B addition in Q3. Analysts expect a 4% Q4 contraction rate for exports after a 10.4% (was 10.0%) clip in Q3, and a 1% Q4 contraction rate for imports after a 2.5% (was 2.3%) Q3 pace.