Thursday, October 11, 2007

More On The Trade Deficit

Followup to the post below:

Gangbuster positive data today on international trade. Adjusted for inflation the trade deficit in goods is the lowest since February 2004 and down $7.2 billion versus a year ago, the largest one-year drop on record. These numbers suggest trade will add about a percentage point to real GDP growth in the third quarter. As a result we are raising our forecast for real growth in Q3 to 4%.

In our view, many analysts have overestimated the damage to the economy from slower home building. Productive resources have shifted into the trade sector to take advantage of the weaker dollar and strong growth abroad.

From First Trust Advisors (Chief Economist – Brian S. Wesbury).


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