There isn't much new financial data to report before the New Year begins, but we did see information from the Commerce Department on trade in goods and inventories, and it had one particular item that may make your eyebrows raise up.
The international trade deficit was $63.2 billion in November, down $3.6 billion from $66.8 billion in October. Exports of goods for November were $136.4 billion, $0.9 billion more than October exports. Imports of goods for November were $199.6 billion, $2.7 billion less than October imports.A 5% drop in our goods deficit in a month? That seems like quite an improvement, and the trade deficit is down $9.8 billion from the $72.9 billion that we had in November 2018.
However, the improvement isn't for "the good reason", which would be increased exports over imports. Instead, it's because the amount of imports have dropped more than our decline in exports over the last 12 months.
That would ordinarily be the sign of a recession over growth, but maybe Trump's strategy of using tariffs to encourage companies to make products in is paying off after all? One good way to find out is to see if manufacturers' orders are increasing, and we got information last week that shows....not so much.
New Orders
New orders for manufactured durable goods in November decreased $5.0 billion or 2.0 percent to $242.6 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 0.2 percent October increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders increased 0.8 percent. Transportation equipment, also down two of the last three months, led the decrease, $4.9 billion or 5.9 percent to $79.2 billion.
In addition, unfilled orders in durable goods continue to decline while inventories are still increasing. So there are no signs that US manufacturing is picking up as imports have dropped off in the last half of 2019, at least not yet.
And we know that manufacturing employment growth has also leveled off this year (barely more than 6,000 jobs a month over the last year), so do we think that or exports are going to grow more in 2020? Color me skeptical, but it'll go a long way toward determining if the economic "growth" we are seeing as 2019 ends is anything more than a debt-fueled Bubble.
It would be interesting to examine Gross World Product (GWP) for the past decade or two, compare it to US GDP over the same period, and see if trends exist.
ReplyDeleteIt is entirely possible that the US has decreasing influence over, and a diminished presence within, GWP, and that there are now several prime "movers."
Recall those decades past in which it was said, in an economic sense, that when the US "caught a cold," (entered a recession), the world caught pneumonia. And when the US caught pneumonia, the world went on life support.