Trade Goods Deficit Deepens

A sharp rise in the nation's deficit in goods trade made for a nearly $8 billion deepening in the first-quarter current deficit to $124.1 billion. Yet the result is much better than expected in what reflects a comparison with the fourth quarter which, when forecasters made their estimates, stood at $128.2 billion but is now revised sharply lower to $116.2 billion. Note that today's report includes annual revisions.

The goods deficit swelled by $8.1 billion in the first quarter to $220.5 billion and was unable to be offset by other factors which were all flat including the surplus on service trade which did rise but only slightly to $0.3 billion. The main factors for the fourth-quarter revision are the surplus on primary income which was revised $5.2 billion higher, the surplus on services revised $4.2 billion higher, with the deficit on goods revised $1.9 billion lower.

As a percent of GDP, the first-quarter deficit rose to a still moderate 2.5 percent vs 2.4 percent in the prior quarter which was revised from 2.1 percent. This report, amid early skirmishes of trade war, will be taking on closer and closer scrutiny.