Wednesday, November 5, 2014

GDP: Not So Fast...

Last week the Commerce Department reported its first estimate of third quarter GDP growth at 3.5 percent, but there are already rumblings that that figure will be downsized in the next estimate. The big issue is exports.

At the time of the initial estimate, Commerce thought that the export deficit had narrowed over the summer, and estimated that September's trade deficit would be little changed from August's. But now they think the trade deficit widened in that month, by a sizable $3 billion. Because of the slowing economy worldwide, U.S. exports fell by 1.5 percent.

The biggest chunk of that trade gap comes from China. We imported a record $44.9 billion from the Chinese in September, up 13 percent - but exported a mere $9.3 billion to China, down 3 percent.

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