Bloomberg News

Trade Gap in U.S. Probably Widened in September as Imports Rose

November 08, 2012

The trade deficit in the U.S. probably widened in September as imports climbed, economists said before a report today.

The gap grew to $45 billion, the biggest since May, from $44.2 billion in August, according to the median forecast of 75 economists surveyed by Bloomberg.

Consumers in the U.S. have begun to spend more as the job market stabilizes, boosting the inflow of goods made abroad as retailers restock ahead of the year-end holidays. At the same time, exports have weakened for two straight months as the global expansion deteriorated, hurting manufacturers like Emerson Electric Co. (EMR:US)

“Higher oil prices likely joined with stronger consumer demand to lift imports,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. Exports may “get a small boost from industrial demand” for commodities, he said.

The Commerce Department will issue the trade report at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from deficits of $47.6 billion to $42 billion.

A slowdown in global growth curbed demand in both July and August, with exports dropping in two consecutive months for the first time in almost a year. The euro area’s economy hasn’t expanded since the third quarter of 2011, and the rate of growth in both Canada and China has slowed this year relative to last.

No Catalyst

“The pace of growth is unusually weak for this stage of a recovery cycle, and uncertainty in the U.S., China and Europe is resulting in cautious business investment,” Patrick Fitzgerald, director of investor relations at Emerson Electric, said during a Nov. 6 earnings call. “At present, there is no obvious catalyst for economic growth acceleration.”

In the three months to September, U.S. sales at the St. Louis-based maker of equipment for power plants and data centers grew 2 percent from a year earlier, and they were little changed in Europe and China, Farr said.

When those economies begin to turn around, businesses abroad may have an incentive to buy American-made products, which are becoming less expensive as the value of the dollar falls. It was down 3.1 percent on Nov. 2 against a basket of currencies from America’s biggest trading partners after reaching an almost-two-year peak in late July, according to Federal Reserve figures. The data also show the dollar has dropped 28.5 percent over the past decade.

For now, imports are likely to grow as consumer demand firms, widening the trade gap. Consumer spending advanced in September by the most since February.

By contrast, business investment in the U.S. is stalling as concern over the so-called fiscal cliff of tax increases and spending cuts slated for next year holds companies back.

            Bloomberg Survey
===========================================
                             Trade  Initial
                           Balance   Claims
                            $ Blns   ,000’s
===========================================
Date of Release              11/08    11/08
Observation Period           Sept.    3-Nov
-------------------------------------------
Median                       -45.0      365
Average                      -45.0      370
High Forecast                -42.0      450
Low Forecast                 -47.6      335
Number of Participants          75       51
Previous                     -44.2      363
-------------------------------------------
4CAST                        -45.3      360
ABN Amro                     -42.9      365
Action Economics             -44.0      395
Aletti Gestielle             -43.5     ---
Ameriprise Financial         -45.0      378
Banca Aletti                 -45.0      340
Bank of the West             -43.8     ---
Barclays                     -45.2      365
BBVA                         -45.4      359
BMO Capital Markets          -45.0      380
BNP Paribas                  -42.0      340
BofA Merrill Lynch           -45.5      385
Briefing.com                 -46.5      370
Capital Economics            -45.0     ---
CIBC World Markets           -44.6     ---
Citi                         -44.0      365
ClearView Economics          -45.0     ---
Comerica                     -44.2     ---
Commerzbank AG               -46.0      370
Credit Agricole CIB          -44.5     ---
Credit Suisse                -46.5      355
DekaBank                     -45.0     ---
Desjardins Group             -46.4      355
Deutsche Bank Securities     -45.0      365
Deutsche Postbank AG         -46.0     ---
Exane                        -45.0     ---
First Trust Advisors         -45.7      410
FTN Financial                -45.5     ---
Goldman, Sachs & Co.         -47.6     ---
Hammer Partners SA           -45.0     ---
Helaba                       -44.0      365
High Frequency Economics     -45.5      350
HSBC Markets                 -44.7      365
Hugh Johnson Advisors        -44.8      370
IDEAglobal                   -45.0      450
IHS Global Insight           -45.0      365
Informa Global Markets       -44.9      375
ING Financial Markets        -45.0      370
Insight Economics            -45.0      390
Intesa Sanpaulo              -45.0     ---
J.P. Morgan Chase            -46.0      365
Janney Montgomery Scott      -43.0     ---
Jefferies & Co.              -44.5      380
John Hancock Financial        ---       362
Landesbank Berlin            -46.0      360
Landesbank BW                -44.8     ---
Lloyds Bank                  -45.0      370
Market Securities            -45.7     ---
Mizuho Securities            -43.0      370
Moody’s Analytics            -44.6      365
Morgan Stanley & Co.         -45.2      365
National Bank Financial      -45.5     ---
Natixis                      -42.9     ---
Nomura Securities            -45.5     ---
Nord/LB                      -44.5      370
Oxford Economics             -45.3      375
Pierpont Securities          -47.4      375
PineBridge Investments       -42.0      365
PNC Bank                     -45.7     ---
Raiffeisenbank International -46.0     ---
Raymond James                -45.0      355
RBC Capital Markets          -45.5      405
RBS Securities               -45.5      360
Regions Financial            -45.2     ---
Scotiabank                   -45.5      355
SMBC Nikko Securities        -44.0     ---
Societe Generale             -45.7      335
Southern Polytechnic State    ---       367
Standard Chartered           -45.2      420
Stone & McCarthy             -45.5      335
TD Securities                -44.0      350
UBS                          -46.5      340
Union Investment             -44.5     ---
University of Maryland       -46.1      370
Wells Fargo & Co.            -45.4     ---
Westpac Banking Co.          -45.5      370
Wrightson ICAP               -45.0      425
===========================================

To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


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Companies Mentioned

  • EMR
    (Emerson Electric Co)
    • $65.21 USD
    • -0.89
    • -1.36%
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