US Trade Balance: A tough report, but is likely only the beginning – Wells Fargo

The March trade balance report showed the US deficit widened from 39.9 billion to 44.4 billion. Analysts at Wells Fargo point out exports posted a record drop and they expect worst numbers ahead. 

Key Quotes: 

“Overall imports fell 6.2%, while exports saw a record decline of 9.6%, causing the trade gap to widen. Both sides were driven lower by record declines in services, which saw a $10.8 billion decline in both imports and exports.”

“The 6.7% decline in goods exports was the worst since the 2008 recession, with declines in all major categories.”

“This was a tough report, but is likely only the beginning. Even as states begin to re-open and factories come back online, trade will remain under pressure. We forecast global GDP to contract 2.9% this year, which makes an export-led narrowing in the trade deficit unlikely.”