Decline in U.S. Trade Deficit Likely An Abberation
Another factor which indicates that the trade deficit will rise sharply from the March low is that China's trade surplus rose sharply in April.
Even so, this decline still means that first quarter growth will likely be upwardly revised, although the extent (if any) of this depends on how other components are revised. It should however be noted that as the BEA assumed a decline in the trade deficit, the contribution from trade will be limited. The BEA assumption was for a $1.3 billion decline, whereas the preliminary number was $3.8 billion (including the $0.1 billion downward revision of the February deficit). The $2.5 billion discrepancy in a $3.25 trillion quartely GDP is 0.08% or 0.3% at an annual rate. Assuming zero net revisions in other components, this implies a revision from 4.8% to 5.1%.
UPDATE: According to this Marketwatch article inventories, business investments and construction spending have also been stronger than expected, all of which according to the article would raise the number to 6% or more. At the same time however, personal income growth have been revised down.