US February advanced goods trade balance -$147.391 billion vs -$155.5 billion prior

• Prior was -155.5 billion
• Exports +7 billion
• Imports -0.6 billion

The chart is some important context here as this is a small bounce following a huge decline. When you look back to last February when the deficit was $92 billion, exports were at $174B (compared to $178B now) but imports were at $266B (compared to $326B now.

So the whole story here is surging imports and there has been a jump in ‘industrial supplies’ and ‘consumer goods’. I believe the ‘industrial supplies’ line includes gold, which isn’t included in GDP. That should mitigate some of the decline here but it’s all setting up for a poor Q1 GDP report.

Watch out for the update to the Atlanta Fed GDPNow model which will be out around 11 am ET tomorrow.

This article was written by Adam Button at www.forexlive.com.