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Trade's GDP Impact: Neutral To Slightly Negative

By John S. McClenahen When the U.S. Commerce Dept. gets around to publishing GDP numbers for this year's first calendar quarter, trade probably won't be recorded as having been a major drag on the U.S. economy. "Trade looks like it will be neutral for overall economic growth in the first quarter," says Stan Shipley, a senior economist at Merrill Lynch & Co., New York. Meanwhile, Maury Harris, an analyst at UBS Warburg LCC, New York, speculates that U.S. trade could subtract about half a percentage point from first-quarter GDP growth -- if January's $33.2 billion trade deficit is repeated in February and March. In January, U.S. merchandise imports advanced 0.5% following a 1.2% decline in December. Merchandise exports grew 0.9% in January. However, notes Merrill Lynch's Shipley, January's reported increase in consumer goods imports and a related decline in capital-goods exports are primarily the product of cell phones being statistically reclassified -- from capital goods to consumer goods.

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