February 2014 Trade Data Shows Exports Weak

A quick recap to the February 2014 trade data released today shows a mixed picture of the economy – with the unadjusted data saying export growth decelerated month-over-month – and imports accelerating month-over-month.

• Import goods growth has positive implications historically to the economy – and the seasonally adjusted goods and services imports were reported up month-over-month. Econintersect analysis shows unadjusted goods (not including services) growth acceleration of 0.4% month-over-month (unadjusted data). The rate of growth 3 month trend is accelerating.
• Exports of goods and services were reported down, and Econintersect analysis shows unadjusted goods exports growth deceleration of (not including services)3.1% month-over month. The rate of growth 3 month trend decelerated significantly.

Inflation Adjusted But Not Seasonally Adjusted Year-over-Year 3 Month Rolling Average – Goods Export (blue line) and Goods Import Excluding Oil (red line)

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• The decrease in headline exports was broad based (except consumer goods which increased), while the slight rise in headline imports was broad based despite a decline in oil imports.
• The market expected a trade deficit of $35.0 to $41.0 billion (consensus $38.8 billion) and the seasonally adjusted headline deficit from US Census came in at a deficit of $42.3 billion.
• It should be noted that oil imports were down 43 million barrels from last month, and down 8 million barrels from one year ago.
• The data in this series is noisy, and it is better to use the rolling averages to make sense of the data trends.

The headline data is seasonally but not inflation adjusted. Econintersect analysis is based on the unadjusted data, removes services (as little historical information exists to correlate the data to economic activity), and inflation adjusts. Further, there is some question whether this services portion of export/import data is valid in real time because of data gathering concerns. Backing out services from import and exports shows graphically as follows: