Balance of Trade (Merchandise Trade Balance)

The Balance of Trade is the difference between a nation’s exports and imports of merchandise. A positive balance of trade, or a surplus, occurs when a county’s exports exceed its imports. A negative balance of trade, or a deficit, occurs when imports surpass exports. Rising exports add to GDP while falling imports are subtracted from it. The U.S. merchandise trade balance has been in a deficit since the mid-1970s. Rising deficits can be reflective of increased consumption, which can be a sign of a strengthening economy.

POTENTIAL IMPACT ON INTEREST RATES: MODERATE