Still More Winning! “U.S. goods trade deficit in August hits record high”

Headline from Politico. From today’s trade release for August:

Figure 1: US trade balance, bn. $, SAAR (blue, left scale), as a share of GDP (red, right scale). Light orange shading denotes Trump administration. Nominal GDP interpolated quadratic match. Source: BuCensus/BEA via FRED, BEA, and author’s calculations.


21 thoughts on “Still More Winning! “U.S. goods trade deficit in August hits record high”

  1. macroduck

    Just a guess –

    There may be a distortion in the trade balance due to quarantine efforts. Imports rose faster than exports in August, with the oil balance fairly steady. Oil doesn’t need much human effort to cross borders. Many goods require considerably more effort. It may be that swings in transport capacity, rather than in demand or production, drove the big rebound in both sides of the trade account in August. If so, then aggregate import and export figures for August less about relative demand in the U.S. and the rest of the world than usual, morecabout conditions in the transport sector.

  2. pgl

    “Commerce will release trade figures for January through September on Nov. 4, the day after the presidential election.”

    The next employment report comes out Nov. 6. So no chance of good news before the election unless the stock market booms. Oh wait – Trump’s latest stupid announcement just tanked the stock market.

    1. rjs

      the 1st estimate of third quarter GDP comes out on October 29th, and it could print higher than +30% on PCE and inventory rebuilding….it’s going to be difficult to explain to a numerically challenged population that it’s not a reversal of the 2nd quarter downturn, like you know the Orange One will be insisting that it is..

        1. Moses Herzog

          I know one person who did a very similar calculation, and same cognitive interpretation ERROR rjs is discussing with May’s monthly consumption numbers as it relates to quarterly GDP. I know another person who was roughly 3/4s step way from encouraging him to.

          1. pgl

            Yes – report accurate and easily understood data and nothing else. Back in the late 1970’s when inflation was high and people got very confused about real v. nominal changes, I noticed our copy of the International Financial Statistics tapes routinely gave us real GDP figures but not the nominal figures. I quipped in a seminar that all macroeconomic data should be reported this way. And yea people chuckled but alas my suggestion was never adopted.

      1. Willie

        A high percentage may have already voted at that point. And the failure by the GOP to get serious about economic relief means that the numbers and any glad handling will not play very well among the ordinary people who will be hurting.

  3. Bruce Hall

    Some of the details:
    • The deficit with Germany increased $1.6 billion to $4.6 billion in August. Exports decreased
    $0.3 billion to $4.9 billion and imports increased $1.2 billion to $9.6 billion.
    • The deficit with Japan increased $1.0 billion to $4.3 billion in August. Exports increased $0.6
    billion to $5.3 billion and imports increased $1.5 billion to $9.6 billion.
    • The deficit with China decreased $1.9 billion to $26.4 billion in August. Exports increased
    $1.7 billion to $11.2 billion and imports decreased $0.2 billion to $37.7 billion.

    Some shifting of sources, but too early to know if that trend will continue. With the U.S. shut down by state governors, it’s not too surprising that demand is met with imports.

    1. macroduck

      Which doesn’t explain how all those shut-down states increased exports in August. Brucey, you really are most entertaining when you try to do economics. It’s like watching the Keystone Cops try to demonstrate forensic science.

    2. pgl

      Only single statistic Bruce “no relationship to Robert” Hall would look at a monthly change to spot a trend. What’s the matter Brucie – Kelly Anne Conway has never taught you to look at either BEA or Census data over a longer period of time?

  4. Barkley Rosser

    But this is good news!!! We are getting lazy foreigners to work hard to produce stuff for us to have while we give them a lot of worthless paper for it, ha ha ha!!!

    1. Moses Herzog

      The Chinese fell for the old fiat money booby trap AGAIN!!!! Phone up Peter Schiff, Gerald Celente, Alex Jones, Max Keiser, and Jim Rickards and tell them the latest brain dead bimbo at “RT” is frantically calling them for an interview.

      For those not getting the joke here (In which Chinese trade officials the actual legitimate laugh), Gerald Celente was a similar character to our beloved Barkley Junior, in that he was starved for attention. So how did con man Gerald Celente get that attention?? He went around shortly after the 2008 derivatives, CLOs, and swaps crisis telling everyone that holding paper positions in gold was extremely dangerous. Shortly after which point, Celente lost a significant portion of his personal wealth by…… wait for it…… wait for it……. wait for it……. losing his own money in paper positions in gold. So I guess Celente was willing to give up everything for a vivid “real world example” for his TV devotees.

      1. Moses Herzog

        *Chinese trade officials get the actual legitimate laugh, I should have typed in above comment.

  5. The Rage

    Again, this is BW2. In reality, rising US deficits and imports should lower foreign currency in the US and push up foreign currency……but instead, they buy us debt which causes dollars to be recycled into the US which the rich use to buy treasuries and assets like stocks. A big transfer is going to push up spending by households pushing up the trade deficit.

    1. pgl

      BW2? No we are not going back to a fixed exchange rate system. Could you please pull the plug on this insane Russian bot?

        1. Menzie Chinn Post author

          The Rage: BW2 refers to a system where quasi fixed exchange rates underpin an internatoinal monetary system where US runs deficits and foreigners get T-bills. You are contending that’s what characterizes 2020?

  6. spencer

    Over the last year or so we have used fracked oil to reduce oil imports and expand oil exports to the point that we now have roughly a balance in POL trade –actually a slight surplus. But now the rig count has fallen from over 800 to under 200. With fracking no longer profitable –Slumber ger just sold its fracking operations — this oil surplus is likely to quickly disappear. Moreover, non-POL imports are almost back to last years peak while non-POL exports have only regained about half of the early 2020 collapse. Going back to the days of Nixon, the US has an extremely strong import elasticity, so us imports are likely to keep on rising. Together, these strongly imply that the US trade deficit should continue to expand sharply.

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