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On the radar: Net exports likely to drag less in 3Q, inventories less supportive of growth compared to 2Q

The data on the international trade in goods and services had a deficit of $52.5 billion in the third quarter, up from the $55.0 deficit in the second. This points to less drag in the net exports component of GDP from the second quarter. The already reported advance estimate of third quarter GDP had a -0.08 contribution from net exports with the available data. The preliminary trade numbers for September released on Tuesday don’t suggest much revision for the second estimate when third quarter GDP data is released at 8:30 ET on Wednesday, November 27.

The release of the data on factory inventories in September on November 4 provided the third part of the advance data on business inventories after the retail and wholesale numbers were released on October 28. The official report on business inventories won’t be released until 10:00 ET on Friday, November 15. However, adding up the data points to only modest inventory growth for the third quarter. The change in private inventories will likely remain a small drag on overall growth similar to the -0.05 contribution reported in the advance estimate of third quarter GDP.

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