Second-quarter GDP view cut after trade data (by Greg Robb)
WASHINGTON (MarketWatch) - Several economists have cut their second-quarter GDP view after the release of the June trade deficit data showing an unexpected widening of the gap. Government statisticians routinely estimate the final month's trade balance in their initial estimate of quarterly GDP growth. Last month, they had assumed about a $1 billion narrowing in the June trade gap in their estimate that the economy grew at a 1.3% rate in the second quarter. However, the June trade deficit widened by $2.3 billion. Troy David, economist at Barclays Capital, said the firm has lowered its second quarter GDP estimate to 0.6%. "It certainly appears the U.S. economy was close to stalling in the second quarter," added Jay Bryson, global economist at Wells Fargo Securities. Ian Shepherdson, chief U.S. economist at High Frequency Economics, was not as pessimistic. He said the trade numbers imply a 0.4% downward revision to GDP but didn't anticipate any change when all other components are factored in. The government will release revised second quarter data on Aug. 26.