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Karim writes:

  • Trade improves both in balance and direction, likely benefitting from inventory restocking as goods balance improves much more than services balance
  • Exports up 1.6% and imports down 0.6%
  • Real trade balance narrows by 3.9bn; will likely boost Q2 GDP estimates by 0.25-0.50% (median estimate now -1.8%)
  • Import prices up 3.2%, 0.2% ex-petroleum and -0.1% from China (now -2.4% y/y)
  • Michigan survey much lower than expected (64.6 vs prior 70.8) and at lowest level since March
  • Consistent with other surveys (ABC, Conf Board)
  • Lower gas prices may help in weeks ahead but still strong headwinds from labor market