Summary
Earlier today, the Commerce Department reported that the US trade deficit (goods and services) narrowed to $50.1 billion in July. This compared to a revised $55.0 billion deficit in June. Elsewhere, the Labor Department reported a "surprise" decline in the August Producer Price Index. Suggestion: If you are a producer and your raw material costs did not decline in August, send a bill for the difference to Alan Greenspan!
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I will likely follow up on today's releases with additional comments/statistics. Here are the basics.
July Trade Data
The reported July trade deficit of $50.1 billion narrowed from June's revised shortfall of $55.0. The June figure was originally reported at minus $55.8 billion, a record. It had beaten the prior record month of April 2004, which came in at minus $48.194 billion. Thus, the revised June figure remains a record.
The July deficit was the result of imports that totaled $146.0 billion, and exports totaling $95.9 billion. These figures compared with respective revised import/export figures for June of $148.1 billion and $93.1 billion.
Following are the seven months of now-reported trade deficits for 2004 (in billions), incorporating the latest revisions:
January $ 45.768
February $ 45.785
March $ 47.052
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1st Qtr. $138.605
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April $ 48.194
May $ 47.070
June $ 55.021
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2nd Qtr. $150.285
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July $ 50.145
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7-Mo. Total $339.035
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Exclusive of the net effect of other revisions to gross domestic product for 2004's second quarter, June's lower trade gap, when incorporated with small revisions to April and May data, should have a positive impact on GDP. However, the trade-only impact on the pending final revision to GDP for the second quarter should be minor.
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August Producer Prices
The Labor Department, unintentionally I'm sure, did us a favor this morning, vis a vis the current John Williams series we are running on the subject of government data. Earlier today, Labor reported a 0.1% decline in the Producer Price Index during August.
The PPI, excluding food and energy -- the so-called "core" rate -- was also reported as having declined 0.1% during August.
Year over year through August, producer prices rose 3.4. For the three months ended August, the PPI, based on the Labor Department's data, actually fell at an annual rate of 1.1%.
Consumer Producer Import
Price Index Price Index Prices
Month/ ---------------------------------------
Year Y/Y L3Mos* Y/Y L3Mos* Y/Y L3Mos*
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08/04 -Rel. 9/16- 3.4% -1.1% 7.2% 7.3%
07/04 3.0% 3.7% 4.0% 2.2% 5.5% 6.5%
06/04 3.2% 4.8% 4.0% 4.7% 5.7% 6.1%
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*Trailing three-month com-
pound annual rate of change.
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