TRADE TRAVAILS

The U.S. trade deficit steadily improved from a monthly high of $102 billion in 3/22 to $60 billion in 8/23, and the improvement unsurprisingly boosted GDP growth. Since then, however, it has worsened in eight of the last nine months and now stands at -$75 billion. The worsening trade deficit reduced 24Q1 GDP by 0.65 of a percentage point and the 24Q2 impact is likely to be meaningfully worse.