Trade Activity Slows Sharply

Trade activity slowed sharply in March though the deficit narrowed, down a sharp 9.5 percent to $56.9 billion vs February's $62.9 billion. Exports fell 1.7 percent to $116.7 billion with consumer goods showing a steep decline together with wide declines for industrial supplies, autos, and foods. A positive, however, is a 1.5 percent uptick in capital goods exports, one that follows a smaller gain in February and hints at resiliency for global business investment. But the import side of the report points at declining domestic demand with consumer goods down a very steep 9.1 percent. Capital goods are also weak, down 3.6 percent. Cross-border activity has been a major negative for the global economy and March's goods data point to continuing trouble though they will, however, give a lift to first-quarter GDP. This report represents the goods portion of the monthly international trade report which will be posted next Wednesday.

Recent History Of This Indicator:
The trade deficit in goods is expected to narrow to $62.6 billion in March vs a $64.7 billion deficit in February. Though wide, the deficit does show gains for exports which, though a negative for GDP, are otherwise a big plus for the economy and specifically for factory jobs. Exports of goods rose 1.4 percent in February and 2.0 percent in January and a similar gain for March would suggest that this year's depreciation in the dollar is beginning to give exporters some lift. The import side offers clues on domestic demand which, though rising in February, did fall back in January.