In the May issue of the Forbes Growth Investor, I wrote about the dramatic decline in international trade. Today, we were given more evidence of this. The "U.S. International Trade in Goods and Services" report for March was released this morning. Not surprisingly, due to the recession, we saw fewer imports and exports. However, imports fell by less than exports. Imports were down $1.6 billion to $151.2 billion in March from $152.8 billion in February. Exports dropped $3 billion to $123.6 billion in March from $126.6 billion in February.
The Advance estimate for first quarter GDP was -6.1%, but that report showed a bigger decline in imports than exports. As a result, net exports added 1.99 percentage points to the first quarter GDP report. The Preliminary estimate for first quarter GDP comes out on May 29. This is a more accurate estimate because it is based on more complete data. Unfortunately, today's trade data indicates that the contribution from net exports was less than shown in the Advance estimate. As a result, GDP in the first quarter likely fell by more than 6.1%.