The U.S. economy is growing at a 4.4 percent annualized rate in the third quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Wednesday, following the latest data on international trade.
This Atlanta GDPNow forecast is slower than the 4.7 percent GDP growth pace calculated by the regional Fed’s forecast program Tuesday.
The Atlanta Fed program lowered its estimates on net exports to third-quarter real GDP growth declined from -0.70 percentage points to -0.76 percentage points.
After Wednesday’s morning's light vehicle sales release from the BEA, the estimates of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth declined from 3.6 percent and 16.9 percent, respectively, to 3.3 percent and 16.4 percent, respectively.
The next GDPNow update is Tuesday, September 11.
Earlier Wednesday, the U.S. trade deficit rose to a five-month high in July, with the politically sensitive gap with China hitting a record high, which economists said could embolden the Trump administration to aggressively pursue its “America First” agenda.
The administration’s protectionist trade policy has left the United States embroiled in tit-for-tat tariffs with the European Union, Canada and Mexico as well as an escalating trade war with China. President Donald Trump claims the United States is being taken advantage of by its trade partners, Reuters explained.
The deterioration in the trade deficit reported by the Commerce Department on Wednesday came a day before the end of a public comment period on a list of $200 billion worth of Chinese goods widely expected to be hit with tariffs soon.
“America still isn’t getting a fair deal on trade and that can only mean one thing,” said Chris Rupkey, chief economist at MUFG in New York. “President Trump is going unleash another $200 billion in tariffs on China imports.”
The Commerce Department said the trade deficit increased 9.5 percent to $50.1 billion as exports of soybeans and civilian aircraft dropped and imports hit a record high. The trade gap has now widened for two straight months.
Economists polled by Reuters had forecast the trade shortfall swelling to $50.3 billion in July.
Material from Bloomberg and Reuters were used in this report.
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