The US trade figures for Q4 2012 came out this morning and they surprised analysts by showing a trade deficit that shrank 21% to $38.5 billion in December. According to Bloomberg News this was a lower deficit than any of 73 economists estimated prior to the release.
For me the significance of this report is that it means that the 0.1% contraction in GDP for Q4 2012 will likely be revised up to an increase in GDP when figures are revised next month. And while the trade figures were flattered in large part due to a surge in petroleum exports and a decline in petroleum imports, the eventual adjustment to GDP underlines the fact that the US economy, independent of wrangling over fiscal policy is in the midst of a sustainable cyclical recovery. There is no reason to believe this recovery would...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.