US: Trade will be less of a drag on Q4 GDP - Wells Fargo

Data released today showed that the trade deficit narrowed in November. According to analysts from Wells Fargo, weakness in petroleum and cellphone imports drove the large decline in the trade deficit. They explained that trade likely will be less of a drag on real GDP growth in Q4 than what they originally projected.

Key Quotes: 

“The U.S. trade deficit narrowed from $55.7 billion in October to $49.3 billion in November, which was significantly smaller than most analysts had expected.  Although exports of goods and services fell $1.3 billion in November, the overall trade deficit narrowed because imports nosedived $7.9 billion.”

“Weakness in imports was concentrated in petroleum products, which fell $2.9 billion on weaker volumes and lower oil prices.”

“Real imports of goods plunged 3%. Although some rebound in December is likely, real net exports probably will not be as much of a drag on real GDP growth in Q4 as we originally projected.”