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US Trade Deficit

Trade Deficit

The trade deficit is still way above 2019 and 2020 levels.

Why it matters: During Q1, booming imports helped drag GDP into its first contraction of the year, which lit the fuse on recession fears. August’s encouraging data means the economy has a tailwind, albeit a modest one, at a time when stubbornly high inflation and turbulent markets have darkened the outlook.

What they’re saying: “We estimate that third-quarter GDP growth was 3.3% annualized, with that gain almost entirely reflecting the boost from net exports,” wrote Andrew Hunter, senior U.S. economist at Capital Economics, in a research note. Yes, but: The export boost may not last, especially with the U.S. dollar on a tear against its major counterparts, and domestic consumption and investment slowing broadly.

Axios Macro By Neil Irwin and Courtenay Brown · Oct 05, 2022