The U.S. monthly goods and service trade deficit in March surged by the greatest amount since December, 1996, to its highest level since October, 2008 – just after the collapse of Lehman Brothers and the height of the financial crisis. The jump was keyed by the biggest monthly import surge on record.
Just as important, as Congress continued debating President Obama’s request for new trade negotiating authority, the real trade deficit heavily influenced by trade deals – like the President’s proposed Trans-Pacific Partnership (TPP) – hit its highest monthly level, too, and this increase has cut inflation-adjusted growth during the feeble recovery by nearly 20 percent.
Here are selected highlights of the latest monthly (March) trade balance figures released this morning by the Census Bureau:
>The combined goods and services trade deficit skyrocketed by 43.12 percent in March, from an upwardly adjusted $35.89 billion to $51.37 billion. This monthly increase, the biggest since December, 1996, was fueled by the biggest (7.71 percent) overall import surge on record – from an upwardly revised $222.09 billion to $239.21 billion.
>Exports rose as well in March, but only by 0.88 percent. The huge disparity between export growth and import growth in the wake of the West Coast ports labor agreement indicates how lopsided U.S. trade flows remain.
>Just as disturbing, as Congress’ debate over President Obama’s trade agenda heats up, the new trade data show that the portion of U.S. trade flows most strongly influenced by trade deals and related policies – in non-oil goods – shattered its old monthly record for deficits in inflation-adjusted terms. The new total of $62.55 billion eclipsed the previous $51.43 billion mark, set in January, by 21.62 percent.
>Since rising trade balances subtract from economic growth, the increase in this real non-oil goods deficit has now cut cumulative U.S. economic growth after inflation by a stunning 19.49 percent since the recovery technically began in mid-2009.
>The March trade figures also revealed a new monthly record deficit in manufacturing. The $71.96 billion shortfall topped the previous all-time high – last October’s $71.22 billion – by 1.04 percent.
>Thanks in part to the gradual restoration of full service at West Coast ports, March manufacturing exports rose on month by 15.39 percent. But the much larger amount of imports soared by an even greater 23.80 percent.
>The manufacturing trade deficit is now running 22.04 percent ahead of 2014’s record level.
>Other noteworthy March trade results included the first $7 billion-plus monthly merchandise trade deficit with TPP country Japan since March, 2012, and a 33.17 percent increase in the goods trade shortfall with Korea – whose recent trade deal with the United States is the administration’s model for the TPP.
>Since the Korea agreement went into effect, also in March, 2012, the goods trade deficit with Korea has nearly quadrupled on a monthly basis, from $564.2 million to $2.2 billion.