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International Trade (Mar.) & Productivity (Q1)

The trade deficit narrowed slightly in March to $69.4bn, from $69.5bn, with exports down by 2.0% m/m and imports falling by 1.6%. The $5.1bn decline in goods exports included a $1.2bn drop in civilian aircraft shipments and a $0.9bn fall back in exports of non-monetary gold. Goods imports fell by $4.2bn, led by a $4.7bn drop in imports of autos and parts. The March data turned out to be a little better than the BEA assumed in its preliminary first-quarter GDP estimate although, factoring in the weaker-than-expected March construction spending data, released yesterday, it still looks like GDP growth was about 1.6%. Second-quarter export growth is currently tracking at 2.5% annualised, with import growth forecast to be 4.2%. The upshot is that net external demand will still be a drag on second-quarter GDP growth, but not as bad as we previously feared.

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