US: Real exports rise but real imports rise faster  - Wells Fargo

According to analysts from Wells Fargo, exports and imports appear to be turning around but they warn that, US GDP growth, however, real imports are growing faster than real exports at present.

Key Quotes: 

“The U.S. deficit in international trade in goods and services widened to $48.5 billion in January from $44.3 billion in December. The out turn came as little surprise because preliminary data on goods trade that were released last week indicated that an increase in the overall trade deficit in goods and services was in the cards. Although the value of exports rose by $1.1 billion in January, the deficit increased sharply due to the $5.3 billion jump in the value of imports of goods and services.”

“The value of exports in the November-to-January period was up 4.3 percent on a year-over-year basis. The value of imports grew 5.3 percent during that period. Some of this acceleration in export and import values reflects higher commodity prices in recent months. That said, growth in real exports and real imports have strengthened as well in recent months. This pick-up in real export growth is consistent with signs of stronger economic growth, at least on the margin, in many of America’s major trading partners.”

“Although real net exports likely will not depress overall GDP growth in Q1-2017 as much as they did last quarter, the drag from the external sector could amount to as much as a full percentage point of GDP growth due to continued strength in real imports.”