Chart of the week
Latest data show that the US trade balance significantly improved in October and November, falling from $53 billion in September to $43 billion two months later. The improvement was primarily due to lower imports.
Our analysis
Fewer imports from China are the main reason behind the improvement. While direct monthly comparisons cannot be made from the per-country data, we can see that imports from China between November 2018 and November 2019 fell by $10 billion, a number in line with the overall fall in imports over the period.
Other things equal, the fall-off in imports is positive for fourth-quarter growth. However, offsetting this effect are monthly inventory figures that reveal significant reductions. As a result, the net effect of these two factors on US growth is likely to be limited.
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The opinion expressed above is dated 9 January 2020, and liable to change.
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