(What’s Left of) Our Economy: A Mixed Bag of May U.S. Trade Figures

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(What's Left of) Our Economy. trade, Census Bureau, China, exports, Germany, high tech goods trade, imports, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, recovery, services trade, South Korea, Trump

America’s goods and services trade deficit decreased by 2.27 percent sequentially in May, to $46.51 billion, as services exports ($64.82 billion) and services imports ($43.84 billion) both hit all-time monthly highs. Combined exports rose 0.45 percent on month to $192.03 billion – their best total since April, 2015 ($192.59 billion).

But the huge, chronic U.S. manufacturing trade shortfall jumped by 13.92 percent, to $80.10 billion, its second highest level ever (after last November’s $80.75 billion). Merchandise exports to South Korea – whose free trade deal with the United States has been faulted by President Trump – rose sequentially to a record monthly level of $4.49 billion. Yet the immense U.S. goods trade deficit with China soared by 14.39 percent, to an eight-month high of $31.61 billion. The jump came amid signs of higher overall U.S.-China tensions.

And the overall year-to-date U.S. trade deficit of $233.07 billion was its highest since January-May, 2012’s $238 billion, when growth was somewhat faster. In fact, the cumulative trade drag on the long but weak American economic recovery (as of the first quarter of 2017) remained above 10.50 percent (representing nearly $230 billion in lost inflation-adjusted growth). Nearly twice as great has been the growth hit from the increase in the Made in Washington real non-oil goods deficit was still nearly twice as great.

Here are selected highlights of the latest monthly (May) trade balance figures released this morning by the Census Bureau:

>In May, the total U.S. trade deficit dropped by 2.27 percent, from a downwardly adjusted $47.59 billion to $46.51 billion.

>Highlighting the results were record services exports ($64.82 billion) and services imports ($43.84 billion). The services trade surplus improved by 1.04 percent on month, from April’s upwardly adjusted $20.77 billion to $20.99 billion.

>The total trade deficit’s narrowing was also helped by the best monthly combined goods and services exports figure ($192.03 billion) since April, 2015’s $192.59 billion. The May total export level was 0.45 percent higher than April’s upwardly adjusted $191.17 billion.

> Total imports inched down by a mere 0.09 percent in May, from April’s upwardly adjusted $238.76 billion to $238.54 billion.

>Another May record: U.S. merchandise exports to South Korea, whose 2012 trade agreement has been criticized by President Trump. These American goods sales reached $4.49 billion – a 1.48 percent increase over April’s $4.43 billion.

>U.S. goods imports from South Korea declined by 3.65 percent on month in May, to $5.96 billion, and the merchandise deficit plummeted by 16.60 percent, to $1.46 billion. That total, however, is still nearly three times greater than the trade gap when the trade treaty went into effect in March, 2012 ($561 million).

>At the same time, as Mr. Trump has soured on China for North Korea-related reasons, the PRC’s mammoth goods trade surplus with the United States jumped 14.39 percent sequentially in May to $31.69 billion – an eight month high.

>U.S. goods exports to China climbed by 3.59 percent sequentially in May, but imports were up much faster – by 11.56 percent.

>Year-to-date, moreover, the China merchandise trade surplus is up 5.28 percent.

>The widening of the China gap could largely explain the big (13.92 percent) sequential deterioration of the huge, chronic U.S. manufacturing trade deficit – from $70.31 billion in April to $80.10 billion in May. That May figure is the second worst on record, after last November’s $80.75 billion.

>Manufacturing exports advanced by 3.80 percent on month in May, from $89.26 billion to $92.65 billion.

>But the far larger amount of manufacturing imports soared by 8.26 percent, from $159.57 billion to $172.75 billion.

>These results pushed the January-May manufacturing trade deficit up 6.96 percent, to $356.226 billion.

>Year-to-date manufacturing exports have risen by 3.67 percent in 2017. But the much larger amount of imports is up 5.10 percent.

>The good May results notwithstanding, the total U.S. trade deficit for the first five months of 2017 ($233.07 billion) was the worst such figure since the $238 billion of 2012 – when economic growth was somewhat faster.

>America’s trade performance with Germany, which the president also has criticized, provided better news in May. The U.S. merchandise shortfall dropped by 8.90 percent on month, to $4.99 billion, as American goods exports advanced and imports fell. And year-to-date, the bilateral gap is down by 6.73 percent.

>Less encouraging were May’s high tech goods trade numbers – which tend to be volatile. The American global deficit in this category skyrocketed by 56.73 percent, to $9.47 billion.

>U.S. high tech goods exports were off only by 0.51 percent sequentially, to $28.48 billion. But imports rose by 9.46 percent, to $37.95 billion.

>Year-to-date, the high tech goods gap has ballooned by 37.13 percent – to $34.58 billion. As with the overall trade deficit, that’s the highest figure since the first five months of 2012 ($35.21 billion).

>The cumulative trade drag on the long but slow American economic recovery stood at 10.66 percent as of the first quarter of 2017. That means that the increase in the inflation-adjusted trade deficit since the expansion began in the second quarter of 2009 has cut real economic growth during this period by $229.3 billion.

>The trade drag of the Made in Washington trade deficit – which adjusts trade flows for inflation and omits service and energy trade flows that are only lightly affected by U.S. trade policy – has been nearly twice as great. As of the first quarter, it stood at 20.57 percent of cumulative growth, or a $441.51 billion hit.

>Between April and May, this real non-oil goods trade deficit grew shrank from $62.23 billion to a still lofty $60.38 billion. If June’s total is comparable, the Made in Washington trade drag on the recovery will rise yet higher, and will be calculable once the second quarter gross domestic product figures are released.

(What’s Left of) Our Economy: Record Gaps in Manufacturing, Hi-Tech Goods Help Drive November Trade Deficit Bounce

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(What's Left of) Our Economy. trade, Eurozone, exports, high tech goods, imports, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, oil, recovery, South Korea, trade deficit

America’s goods and services trade deficit grew sequentially for the third straight month in November. The 6.80 percent monthly rise pushed the shortfall to $45.24 billion – its highest total since February’s $45.26 billion. Leading the increase were record monthly deficits in manufacturing ($80.75 billion), high tech goods ($13.53 billion), plus the great shortfall in oil in current dollars ($6.02 billion) since August, 2015 ($7.07 billion). Largely as a result, the merchandise deficit of $66.63 billion was the largest since March, 2015 ($70.40 billion). More encouragingly, the services trade surplus ($21.39 billion) was its largest since December ($21.57 billion).

Overall goods and services exports fell sequentially (by 0.24 percent) while their imports rose (by 1.06 percent) and hit another post-August, 205 high. Big monthly merchandise deficit increases were registered with the Eurozone (up 18.56 percent), and Korea (88.22 percent). And the November increase in the real non-oil goods (Made in Washington) portion of the trade deficit to a five-month high of $59.30 billion indicates that the trade drag on feeble recovery-era growth is set to increase.

Here are selected highlights of the latest monthly (November) trade balance figures released this morning by the Census Bureau:

>The U.S. goods and services trade deficit rose in November by 6.80 percent, from a downwardly adjusted $42.36 billion to $45.24 billion – the highest such total since February ($45.26 billion).

>The increase was spearheaded by new record deficits in manufacturing ($80.75 billion) and high tech goods ($13.53 billion), and the biggest oil trade gap in current dollars ($6.02 billion) since August, 2015 ($7.07 billion).

>In addition, the overall merchandise deficit of $66.63 billion was the greatest such total since March, 2015 ($70.40 billion).

>Also contributing to the overall rise in the November trade deficit – an 18.56 percent sequential move up in the merchandise trade gap with the Eurozone (to $12.64 billion), fueled no doubt by a weakening currency; and a stunning 88.22 percent jump in the goods deficit with South Korea (to $2.40 billion).

>The November manufacturing trade deficit was 4.90 percent higher than October’s $76.98 billion level, and slightly higher than the previous all-time high of $80.43 billion set in August.

>November manufacturing exports dropped by 5.41 percent sequentially, from $90.91 billion to $85.99 billion, but imports dipped by only 0.68 percent, from $167.89 billion to $166.74 billion.

>On a year-to-date basis, the manufacturing trade deficit stands at $792.30 billion, and is running 3.51 percent ahead of last year’s record pace.

>January-November manufacturing exports are down 6.31 percent year-on-year, while imports are off only 2.01 percent.

> The record high tech goods trade deficit of $13.53 billion hit in November obliterated the old record of $11.72 billion, set in November, 2012, by 15.44 percent.

>High tech goods exports sank by 8.93 percent on month, to $27.79 billion, while imports rose by 5.37 percent. Their $41.32 billion level was the highest since October, 2015 ($41.38 billion).

>Year-to-date, however, the high tech goods deficit is still down 5.80 percent from last year’s levels.

>November’s $6.02 billion current-dollar oil trade deficit was the highest such total since August, 2015’s $7.07 billion total. This figure was also 5.60 percent higher than the October level.

>Yet the oil trade deficit year-to-date ($50.45 billion) is still fully 36.06 percent lower than last year’s January-November figure.

>The higher November merchandise deficit with the Eurozone stemmed from a 10.39 percent in U.S. goods exports to the troubled region, whose currency keeps weakening versus the U.S. dollar, and a 0.72 percent bump up in American goods imports.

>Year-to-date, the Eurozone deficit is still down 3.47 percent from last year’s levels.

>The near-doubling of the U.S. goods deficit with South Korea, a free trade agreement partner of merica’s since 2012, reflected a 10.93 percent decrease in U.S. merchandise exports and a 13.80 percent increase in American imports.

>Year-to-date, the merchandise deficit with South Korea is running 0.56 percent higher than last year’s total.

>One of the few bright November-specific bright spots in the trade report was came in services. Its long-running surplus increased 2.54 percent on month, from $20.86 billion to $21.39 billion. That total was the sector’s best since last December ($21.57 billion).

>Yet a cause for concern is the year-to-date services surplus. At $226.58 billion, it’s currently 5.84 percent lower than last year’s January-November figure ($240.63 billion).

>The combined U.S. goods and services trade deficit for 2016 stood at $453.99 billion – 1.06 percent lower than at this point last year.

>Overall U.S. exports fell 0.24 percent sequentially in November from a downwardly revised $186.28 billion to $185.83 billion. Overall imports increased nearly five times faster – from a downwardly revised $228.64 billion to $231.07 billion. That level was their highest since August, 2015 ($231.26 billion).

>Year-to-date, overall exports are off 2.72 percent while imports are down by 2.42 percent.

>A 5.69 percent monthly rise in the November real non-oil goods trade deficit indicates that these trade flows remain a major drag on the current, historically feeble American economic recovery.

>This Made in Washington deficit – which is heavily influenced by U.S. trade agreements and related policy decisions – had been narrowing lately, with its growth-subtracting on the recovery down to 16.05 percent of the cumulative improvement in real gross domestic product as of the third quarter.

>But in November, it hit its highest level ($59.30 billion) since June ($60.76 billion).

>The publication of next month’s first full-year 2016 trade data will permit a preliminary fourth quarter calculation to be made.

>The American merchandise trade deficit with China declined in November by 1.96 percent, from $31.11 billion to $30.50 billion.

>U.S. goods exports to China’s still healthily growing economy fell by 4.56 percent on month in November, while goods imports were down 2.71 percent.

>Year-to-date, this China shortfall is running 5.90 percent behind last year’s record pace.

(What’s Left of) Our Economy: Record Manufacturing Shortfall Keys August U.S. Trade Deficit Rise

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(What's Left of) Our Economy. trade, Census Bureau, China, exports, high tech goods trade, imports, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, oil, recovery, services, trade deficit

America’s goods and services trade deficit rebounded by just under 3 percent sequentially in August, from an upwardly adjusted $39.55 billion to $40.73 billion. Fueling this increase in part was a new record monthly total for the longstanding U.S. manufacturing trade deficit – to $80.43 billion. Another monthly record set in August came in services imports – where the $42.99 billion in purchases from abroad represented the sector’s second straight monthly high.

The massive, manufacturing-dominated U.S goods deficit with China increased by double digits on month in August, to the highest level ($33.85 billion) since last September. In a related development, the volatile American global high tech goods deficit surged by 51 percent sequentially to its highest level ($10.23 billion) since last November ($11.41 billion). The oil trade gap rose strongly as well, to its greatest total ($5.39 billion) since last December ($5.65 billion).  

Total goods and services exports and imports rose modestly on month in August, and hit their highest levels since July, 2015. But both are down from last year’s levels, as is the combined trade deficit. Yet the shortfall in trade heavily influenced by American agreements and related policy decisions remained a major (nearly $439 billion) drag on inflation-adjusted recovery-era growth.

Here are selected highlights of the latest monthly (August) trade balance figures released this morning by the Census Bureau:

>The U.S. goods and services trade deficit rose in August by 2.98 percent, from an upwardly adjusted $39.55 billion in July to $40.73 billion.

> One leading contributor to the higher total – a record monthly trade shortfall of $80.43 billion in manufacturing, which topped the previous (October, 2015) all-time high of $76.74 billion by 4.81 percent and the July level of $74.83 billion by 7.48 percent.

>The manufacturing deficit so far ($561.26 billion) is running 3.42 percent ahead of last year’s record pace ($542.7 billion from January through August).

>Manufacturing exports year-to-date are 7.08 percent lower than in 2015, while imports are off by just 2.67 percent.

>The August trade deficit was also boosted by the highest monthly services import total on record ($42.99 billion) – which helped cut the month’s services surplus to it lowest level ($19.56 billion) since December, 2013 ($19.33 billion).

>The August services import total topped the old record of $41.48 billion (set in July) by 3.64 percent.

>Also lying behind that record August manufacturing trade deficit: a whopping 51 percent monthly jump in the volatile high tech goods deficit – from $6.77 billion to $10.23 billion. That total represented the highest since last November ($11.41 billion).

>High tech goods exports dipped by 0.93 percent sequentially in August (from $28 billion to $27.74 billion), but imports rose by 9.19 percent (from $34.77 billion to $37.97 billion).

>Nor was the historically bad August manufacturing trade performance helped by a double-digit (11.61 percent) sequential increase in the manufacturing-dominated merchandise deficit with China. At $33.85 billion, the latest monthly total was the greatest since last September’s record $36.30 billion.

>Nonetheless, the China goods deficit is down 5.69 percent in 2016 on a year-to-date basis.

>August also saw America’s current-dollar oil trade deficit rise by near-double digits on month (8.38 percent), from $4.97 billion in July to $5.39 billion. That’s the highest monthly oil deficit since last December’s $5.65 billion – though on a year-to-date basis, the shortfall remains down nearly 50 percent.

>Combined goods and services exports rose by 0.79 percent sequentially in August, from an upwardly revised $186.38 billion to $187.85 billion. That’s the highest monthly total since July, 2015’s $190.11 billion.

>Total imports were up as well on month – by 1.17 percent, from an upwardly revised $225.93 billion to $228.58 billion. That August figure is also the highest since July, 2015 ($230.01 billion).

>But both total exports and imports are off 2015’s year-to-date levels – the former by 4.10 percent and the latter by 3.60 percent.

>As a result, the combined goods and services trade deficit is currently 1.30 percent lower ($330.74 billion) than in the first eight months of 2015 ($335.08 billion).

>Unfortunately, trade remains a major drag on the current, historically feeble U.S. economic recovery. Separate figures from the Commerce Department’s Bureau of Economic Analysis reveal that it has cut cumulative real growth since the current expansion began (in mid-2009) by 8.63 percent, or $192.2 billion.

>The trade toll taken by the Made in Washington portion of the trade deficit (the real non-oil goods total) is much higher – 19.70 percent, or just under $439 billion.

(What’s Left of) Our Economy: Those New Revised GDP Numbers are the Worst Indictment of U.S. Trade Policy Yet

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(What's Left of) Our Economy. trade, exports, GDP, gross domestic product, growth, imports, inflation-adjusted growth, recovery, Trade Deficits

The new GDP revisions released today by the Commerce Department report that America’s trade performance has slowed the current already sluggish recovery to an even greater degree than previously thought, and that an even greater toll has been taken by the portion of U.S. trade flows strongly influenced by American trade policies and deals (like those currently being pursued by President Obama).

In addition, the historically huge bite taken out of first quarter growth this year turns out to have been even bigger, relatively speaking, and although all major import categories set new quarterly records in the second quarter, the same can’t be said for most exports.

Here are the trade highlights from this morning’s GDP report:

>Today’s GDP figures, which present initial second quarter 2015 estimates and revised 2011-2014 data, reveal that inflation-adjusted U.S. trade flows had hampered the current weak recovery through the first quarter more than previous estimates indicated. This development reversed itself only to a small degree in the second quarter.

>The new figures also show that the all-time record relative bite taken from growth by trade in the first quarter of this year was even greater than first judged.

>The new data show that the increase in America’s constant dollar trade deficit since the recovery began in the mid-2009 had slowed cumulative growth by 8.97 percent through the first quarter of 2015. The new data report a 9.33 percent drag – because overall after-inflation growth was lower and because the real trade deficit’s increase was greater than first estimated.

>According to these new figures, in the second quarter of 2015 (the latest data available), a small decrease in the real trade deficit from the first quarter to the second quarter – from the upwardly revised $541.2 billion annualized to $536.3 billion – resulted in trade flows adding 0.13 percentage points to the annualized inflation-adjusted growth figure of 2.30 percent.

>In the second quarter, real total exports rose at a 5.30 percent annualized rate after falling by an upwardly revised 6.00 percent annualized rate in the first quarter. Second quarter real total imports increased only by an annualized 3.50 percent rate – less than half the pace of the first quarter’s 7.1 percent increase, which was left unchanged.

>The new first quarter real trade deficit was the nation’s highest since the second quarter of 2008 ($550.4 billion) and the new second quarter figure is the second highest since then.

>Nonetheless, however discouraging, these recovery-era numbers mask the even greater toll taken out of the recovery by trade flows that are heavily influenced by trade deals and other trade policy decisions. The reason: They include trade in services, where trade liberalization is in relatively early stages, and in oil, which is not dealt with via conventional trade policy.

>When real oil and services trade flows are omitted, the new GDP data reveal that through the first quarter, the increase in the inflation-adjusted trade deficit cut cumulative recovery growth by 21.02 percent – with nearly all of the damage done in the private sector.

>The previous GDP data had reported a 19.82 percent hit to the recovery from the growth of the real policy-shaped trade deficit.

>Preliminary trade figures for June, which will permit calculation of the policy-induced trade hit to real growth through the second quarter, will be released next week.

>According to the revisions, the real trade deficit’s sequential worsening subtracted 1.92 percentage points from the first quarter’s 0.64 percent growth. That’s a bigger proportional hit than the 1.89 percentage point subtraction from a 0.20 real GDP percentage point decline that was previously estimated – and that represented the worst relative trade bite since quarterly changes began to be tracked (in 1947).

>The biggest absolute trade hit to real growth occurred in the third quarter of 1982 – a 3.22 percentage point subtraction. But in that quarter, overall GDP fell at a much greater 1.40 percent annualized rate.

>According to the new figures, the second quarter saw new quarterly records for real imports of goods and services combined, goods and services separately, and services exports.

>Inflation-adjusted combined imports totaled an annualized $2.6550 trillion in the second quarter – higher than the first quarter’s previous record of $2.6325 trillion, which was revised down.

>Inflation-adjusted goods imports totaled an annualized $2.1807 trillion in the second quarter – higher than the first quarter’s previous record of $2.1611 trillion, which was revised up.

>Inflation-adjusted services imports totaled an annualized $427.7 billion in the second quarter – higher than the first quarter’s previous record of $469.8, which was revised down.

>Inflation-adjusted services exports totaled an annualized $664.4 billion in the second quarter – higher than the first quarter’s previous record of $660.6 billion, which was revised down.