Economic Release
US: International Trade in Goods (Advance)
Date: March 27, 2025 07:30 AM CT
| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | $-135.5B | $-145.0B to $-131.1B | $-147.9B | $-153.3B | $-155.6B |
| Imports - M/M | -0.2% | 11.9% | 12.5% | ||
| Exports - M/M | 4.1% | 2.0% | 1.6% |
Highlights
The goods trade gap did not narrow as much as expected in February as it came in at $147.9 billion versus the expected $135.5 billion, and versus a revised $155.7 billion in January. Imports only dipped by 0.2 percent and remained elevated at a whopping $326.5 billion and exports were $178.6 billion, up 4.1 percent on the month.
Imports of motor vehicles and parts rose another 1.2 percent on the month while consumer goods imports were up another 2.8 percent after similar strong increases in January from December. The January surge in imports was widely attributed to front-running tariffs and February looks like more of the same. With more tariffs ahead, including the latest 25 percent on autos, presumably the March report will be similar, and net exports will be a big drag on 1Q GDP.
Imports of motor vehicles and parts rose another 1.2 percent on the month while consumer goods imports were up another 2.8 percent after similar strong increases in January from December. The January surge in imports was widely attributed to front-running tariffs and February looks like more of the same. With more tariffs ahead, including the latest 25 percent on autos, presumably the March report will be similar, and net exports will be a big drag on 1Q GDP.
Market Consensus Before Announcement
After rising $33.5 billion to a whopping $156.8 billion in January, the consensus sees the deficit lower at $135.5 billion in February, still very high, reflecting import orders front-running tariffs.
Definition
This monthly report offers advance import and export data on the goods components of the monthly trade report. Goods make up roughly two-thirds of the nation's exports and roughly three-quarters of imports.
Note that data in the advance goods report are accounted for on a census basis and can differ slightly from subsequent data in the international trade report where goods data are accounted for on a balance of payment basis to adjust for changes in cross-border ownership.
Note that data in the advance goods report are accounted for on a census basis and can differ slightly from subsequent data in the international trade report where goods data are accounted for on a balance of payment basis to adjust for changes in cross-border ownership.
Description
Changes in the levels of imports and exports, along with the difference between the two (the trade balance), are valuable gauges of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the dollar in the foreign exchange market.
Imports indicate demand for foreign goods here in the United States. Exports show foreign demand for U.S. goods. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies.
Market reaction to this report is complex. Typically, the smaller the trade deficit, the more bullish it is for the dollar. Also, stronger exports are bullish for corporate earnings and the stock market. Like most economic indicators, the trade balance is subject to substantial monthly variability, especially when oil prices change.
It is also useful to examine the trend growth rates for exports and imports separately because they can deviate significantly. Trends in export activity reflect both the competitive position of American industry and the strength of domestic and foreign economic activity. U.S. exports will grow when: 1) U.S. product prices are lower than foreign product prices; 2) the value of the dollar is relatively weaker than that of foreign currencies; 3) foreign economies are growing rapidly.
Imports will increase when: 1) foreign product prices are lower than prices of domestically-produced goods; 2) the value of the dollar is stronger than that of other currencies; 3) domestic demand for goods and services is robust.
Imports indicate demand for foreign goods here in the United States. Exports show foreign demand for U.S. goods. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States, since this trade imbalance creates greater demand for foreign currencies.
Market reaction to this report is complex. Typically, the smaller the trade deficit, the more bullish it is for the dollar. Also, stronger exports are bullish for corporate earnings and the stock market. Like most economic indicators, the trade balance is subject to substantial monthly variability, especially when oil prices change.
It is also useful to examine the trend growth rates for exports and imports separately because they can deviate significantly. Trends in export activity reflect both the competitive position of American industry and the strength of domestic and foreign economic activity. U.S. exports will grow when: 1) U.S. product prices are lower than foreign product prices; 2) the value of the dollar is relatively weaker than that of foreign currencies; 3) foreign economies are growing rapidly.
Imports will increase when: 1) foreign product prices are lower than prices of domestically-produced goods; 2) the value of the dollar is stronger than that of other currencies; 3) domestic demand for goods and services is robust.
