US Trade Data Disappoints: Market Jittery


US Trade Data Disappoints: Market Jittery

US Trade deficit widened unexpectedly in September as exports hit a 5 month low pointing towards a slowdown in global growth which is a huge cause for concern for traders and investors. This would also have a huge impact on the GDP numbers for the last quarter for the US economy. As per a report released by the US commerce department, the trade gap widened by 7.6% to 43.03 billion. The August numbers were revised to $39.9 billion from a previously reported $40.1 billion.

The consensus estimates on the street expected the trade deficit to narrow down to $40 billion. The government had assumed a trade deficit gap of $38.1 billion when it reported the GDP growth of 3.5% earlier this month. This means that the GDP figures would be revised downwards once the government reports revisions later this month. The figure that had economists worried was the export number which many now believe would be reduced even further as the PMI report suggested that export orders had shrunk. The PMI report was released on Monday which had come above most estimates. The only glimmer of hope in the report was that consumer goods imports soared to multi-year highs giving indication of the consumer sentiment in the US economy.

Many analysts and economists believe that the divergent growth stories between the US and Europe and even emerging markets like China can pose serious hurdles for a recovering US economy.  Many traders are now focused on the outcome of the European Central bank meeting scheduled for Thursday, as many believe that the ECB would be forced to introduce its own form of quantitative easing to support a flagging Eurozone economies which by the looks of it are on the brink of falling into recession.

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