The U.S. advance indicators report
The U.S. advance indicators report revealed a surprisingly sharp January widening in the trade gap for goods, with a bigger downside surprise for exports than imports, alongside wholesale and retail inventory gains that beat assumptions. The report was consistent with our 2.6% Q1 GDP growth estimate despite offsetting implications for trade and inventories, and the revised December inventory data signal a Q4 GDP growth boost to 2.7% from 2.6%. For January trade in goods, the advance deficit widened to $74.4 B from $72.3 B. Analysts saw a 2.3% drop for goods exports and a 0.5% decline for goods imports, after big respective gains of 2.5% and 2.9% in December, and 3.4% and 3.0% in November. The advance goods data imply a January widening in the goods and services trade deficit to a cycle-high $55.3 B from $53.1 B in December, with declines of 1.5% for exports and a 0.3% for imports. For inventories, a 0.7% January wholesale inventory rise followed a 0.6% (was 0.4%) December increase, alongside a 0.8% retail inventory rise with a 0.3% ex-auto increase that followed respective December gains of 0.3% (was 0.2%) and 0.5%, leaving Q4 and Q1 overshoots for the two sectors. An estimated 0.4% factory inventory rise implies a 0.3% January business inventory increase.