Today's Report (11/04/2021)

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $80.9 billion in September, up $8.1 billion from $72.8 billion in August, revised.

September exports were $207.6 billion, $6.4 billion less than August exports. September imports were $288.5 billion, $1.7 billion more than August imports.

The September increase in the goods and services deficit reflected an increase in the goods deficit of $8.9 billion to $98.2 billion and an increase in the services surplus of $0.8 billion to $17.2 billion.

Year-to-date, the goods, and services deficit increased $158.7 billion, or 33.1%, from the same period in 2020. Exports increased $274.1 billion or 17.4%. Imports increased $432.8 billion or 21.1%.

What Is It?

A monthly report on US exports and imports of goods and services. The US trade balance is the difference between the US's exports and the value of its imports for a given period.

What Are The Fundamental Effects?

This data will be incorporated by the Bureau of Economic Analysis into the advanced GDP estimates, this data can help reduce the size of revisions to the GDP growth in the second estimates.

How Does It Affect The Markets?

DOLLAR - An improvement on the Trade Balance is typically viewed as favorably to the dollar. The more goods and services foreigners buy from the US the more dollar they’ll need to pay for American products. However, flooding the market with even more dollars could weaken the dollar.

STOCKS - If the export growth is strong enough to heighten fears of inflation, it could displease stock investors because the interest rates could edge higher. However, typically stocks fare well in improved trade balance because it means that there is an increase in overseas sales.

BONDS - Don’t just look at the headline figures but focus on what’s going on behind the scenes, if the trade balance improves bond investors prefer the reason to be a fall in imports rather than the exports. If the deficit climbs, traders might hope the cause is a plunge in exports, which would at least ease economic output.