U.S. Trade Balance Stable as Canada's Exports Slow

The Trade Deficit comes in at -29.2B from -29.0 expected.  Last month it was revised to -28.5 B. Exports fell 2.3%.  The Imports fell -1.4%. The real or inflation adjusted deficit moved lower to -39.387 from a revised -39.119. In the 1st quarter the average inflation adjusted deficit was -39 billion which suggests that Trade so far, will have a neglible effect on 2nd quarter GDP growth. This is one piece of the GDP puzzle. 

Canada Trade -0.2Billon vs +1.0B expected.  This should weaken the CAD$ (USD/CAD up).  Exports fell the most in 3 months as demand for Canada commodities and industrial goods declined.  With the increase in demand for commodities of late, perhaps that will be reduced.  However, the Canadian exports rely on US demand and the growth in the US although stable may still suffer as a result of the auto problems. Inventories are still falling at US Wholesalers as inventories continue to be pared from shelves.

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