The fourth quarter 2014 GDP figures released this morning show that U.S. trade flows have slowed the nation’s economic recovery during the final three months of last year, for all of 2014, and since the current economic recovery began in mid-2009. Worse, these costs have been exacted despite major improvement in U.S. energy trade, meaning that the trade deficit strongly shaped by Obama-style trade agreements is the culprit. Although U.S. exports set new quarterly and annual records, so did America’s much greater import flows. The President’s export-doubling goal, meanwhile, has fallen more than 60 percent short of its target, with upcoming GDP revisions leaving no hope of significantly greater success.
Here are the trade highlights from this morning’s GDP report:
>The initial fourth GDP 2014 figures show that the growth slowdown at the end of last year was spurred mainly by a rebound in the U.S. trade deficit to its highest level ($471.5 billion on an annualized basis) since the third quarter of 2010 ($498.4 billion).
>Whereas trade flows added 0.78 percentage points to the third quarter’s strong 5.00 percent annualized growth, they subtracted 1.02 percentage points from the fourth quarter’s 2.60 percent annualized figures.
>On a full-year basis, whereas a narrowing of the U.S. trade deficit added 0.22 percentage points to real GDP growth’s 2.20 percent growth in 2013, the gap’s widening subtracted 0.22 percentage points from last year’s 2.40 percent growth.
>2014 was the first year during which the trade deficit worsened, and therefore slowed growth, since 2011.
>Since the current economic recovery began in the middle of 2009, the trade deficit’s increase has cut cumulative real GDP growth by 5.38 percent – a price that was almost entirely paid by the U.S. private sector and its workers.
>Moreover, this trade deficit worsening has taken place despite the remarkable recent improvement in the nation’s energy trade. Data showing the full-year 2014 non-oil goods trade flows will be released next week.
>The non-oil goods trade data is especially important because these are the trade flows that are most strongly influenced by trade agreements and related policy decisions. The dramatic trade deficit worsening – and even greater GDP hit – sure to be revealed by the upcoming data strongly indicates that the new trade agreements being pushed by President Obama will further undercut growth, and by extension, job-creation.
>U.S. real exports are now up , moreover, are up only 37.98 percent since the first quarter of 2009. As a result, they have fallen way short of President Obama’s commitment to double them by the end of 2014. Future revisions cannot possibly upgrade this dismal performance significantly.