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On the radar: November international trade deficit lowest in just over three years

The November international trade deficit narrowed to -$43.1 billion in November, a smaller deficit for a fourth month in a row. The deficit was the smallest since -$42.0 in October 2016. The report included revisions in the November and October goods data from the advance report released on Monday, December 30.

Exports in goods and services were up 0.7% in November to $208.6 billion, while the surplus in imports of goods and services were down 1.0% to $251.7 billion.

All the data for the October-December period is not in, but so far it is looking like the drag from net exports will be less for the fourth quarter in the advance estimate of GDP when it is released at 8:30 ET on Thursday, January 30. However, the headline should be read with caution. The smaller deficit is a result of rising exports of services in recent months, while exports of goods have been uneven and lower more often than higher. Lower imports of goods and services are likely a reflection of unsettled trade policy and a downshift in business activity as much as that of business switching to domestic sources.

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