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The Advance International Trade in Goods report for February showed the trade deficit narrowing by $4 billion to $64.788 billion, with a .1% drop in exports offset by a 2.1% drop in imports. Exports included increases of $594 million in consumer goods and $769 million in “other goods”, which are chiefly aircraft and military goods, and a $746 million drop in exported foods, feeds and beverages. A $1.257 billion increase in imported industrial supplies, which include petroleum, which was offset by a $2.641 decrease in automotive imports and a $3.034 decrease in consumer goods imports.
The Commerce Department’s third estimate for Q4 2016 GDP raised the previous 1.9% gain to 2.1%, but left 2016’s 1.9% yearly GDP unchanged. An upward revision from 3.0% to 3.5% of consumer spending, largely in services, accounted for the increase, and was offset somewhat by decreases in business investment and exports. Corporate profits were down by 0.1% for 2016, although profits trended upward in Q3 (5.8%) and Q4 (0.5%).
Personal Income increased 3.6% in 2016, with an upwardly revised 0.5% increase in January and a 0.4% increase in February continuing the trend into 2017. Personal consumption expenditures (PCE) for February had a less than expected 0.1% increase, reflecting a decrease in spending for services that was partially offset by an increase in spending on nondurable goods. The PCE Price Index, the Federal Reserve’s preferred measure of inflation, matched the target rate at 2.1%.
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