Advance Trade Deficit in Goods
The Commerce Department Advance Report shows the trade deficit widened by 5.5% in November.
- The international trade deficit was $84.8 billion in November, up $4.4 billion from $80.4 billion in October.
- Exports of goods for November were $127.2 billion, $1.1 billion more than October exports.
- Imports of goods for November were $212.0 billion, $5.5 billion more than October imports.
Series Record High
Trade deficits normally shrink in recessions but not this time. $84.8 billion, if it holds, would be a new record.
The Advance Report only covers goods. The US runs a surplus in services so the combined net will be lower.
For discussion and the latest charts on the combined deficits, please see Not Even Recession Helped the US Trade Deficit.
It’s Easy!
An Amazing Deal
Using Tariffs to Pay Down Debt
So much silliness, but millions believed and still do.
Balance of Trade vs Gold Window
That’s the real issue and tariffs can’t possibly fix the problem. For discussion, please see Trump Does Not Understand Trade, Jo Jorgensen Does.
Mish
His views on trade wars are a perfect illustration of his simplistic thinking.
I wouldn’t call it ‘thinking’
The trade deficit will get a lot bigger soon. Those $600 checks should lead to an economic boom….in China.
Fred Data
How much of that deficit in goods is attributed to basic medical apparel, masks and so forth that we had outsourced to China and other countries and which we had to buy at inflated prices?
In January 2020, the U.S. trade deficit of goods was around $42 billion, with essential medical goods accounting for just 0.81 percent of the total. By June 2020, the U.S. trade deficit in goods had increased to $50.7 billion, with essential medical goods accounting for 7.7 percent of the total.
A 10-bagger in growth of trade for medical goods w/ China.
You beat me to it. I was thinking the same thing. For 50% of the country who’s jobs were safe, took the stimulus and bought durable goods. Then they took the vacation money they would have spent and bought more durable goods for the house.
Since almost all durable goods are made outside the U.S., we should be seeing the trade deficit increase.
I have a friend who is a furniture wholesaler. His customers are having their best year ever. Snapping up those $5k leather sectionals.
I went into Lazy-Boy a few months ago and they had a backlog of 300k recliners. Yes the factories were shut down for over a month but the backlog was getting close to 4 to 6 months.
No kidding….how about that M1 number?
I read one pundit who thinks the mega-rich are all cashing out because they think Biden will end the capital gains tax…….which I don’t believe for a minute.
M2 has been sliding for years and took a steep nosedive this year. Boy are people in for a rude inflation awakening once reversion to mean occurs.
It will be interesting, to say the least. I THINK I want more inflation…..but garden variety inflation….not these exponential moves. I don’t like charts that go straight up or straight down. Makes me nervous in the service.
You mean M2 velocity? M2 supply increased $4 trillion just since March. $15.4 Trillion to $19.3. That is why stocks, housing, Bitcoin, and almost everything is running hot during a recession. Crazy world. How does the Fed prevent the inflationary awakening if M2 velocity returns.
“Biden will end the capital gains tax”
Where is that from? He may raise it.
I said that wrong. What I meant was that (I read somebody’s opinion) he would end the capital gains” tax break” and tax gains as regular income.
It is not a recession. It is a government-ordered country-wide lockdown to prevent the spread of COVID-19. It was an unprecedented measure and can’t be compared to a normal recession. It is more akin to the disruption that you see when a country is invaded in a war. The economy is disrupted and disorganized. All data is going to be weird for a while until things settle down.
We can debate the cause, but without a doubt it was a huge recession.
The second fact is the first round of stimulus checks kept the spending going.
Like in a major war, government expenditures go through the roof. We don’t define the sharp drop of the economies of Poland, France or Russia when the Nazis invaded as a recession. This didn’t come from subprime. It was totally extraneous like an earthquake or a meteor hit. If you see it as a recession then you can slip into a mindset that places blame on those hit hardest as it being their own fault because they made bad choices. That is not what is the reality.
I am with Doug. This is a weird scenario. How can you have ATHs in the stock market and housing in recession? Many people who are unemployed actually increased the wages this year. My daughter did. While she was out of work, she doubled her income with the unemployment benefits. She went back to work after 2 1/2 months and the stimulus and extra unemployment has increased her income over 20% this year compared to last. She went out and bought a new used car this year and used the stimulus check as a down payment.
The housing bubble was called the great recession. Maybe this should be called the 20% of the country recession. The other 80% became more wealthy during this recession than they were at the beginning recession. If you kept your job and have a home or 401k. You are most likely better off now than you were in March.
I have a friend who just locked down a 15 mortgage for 2%. He bought the house two years ago with 5% down. The house has already increased 15% so in the refinance his also getting rid of his PMI as he now has over 20% equity. The house increased 12% this year.
If you look at the numbers, the consumer on average is better off now than in March. Hard to believe but revolving debt is down and discretionary income is up.
His PMI payment was about $118/month. He also lowered his interest rate from 3.25 to 2%. He now has about $300 / month in discretionary money. I bet there are many more like him who refinanced. I actually refinanced in Feb but I just did again 2 weeks ago as I dropped my interest rate from 3.25 to 2.5. I have another $85 / month discretionary income. I am putting into the stock market.
War is pretty recessionary.
How much do you think houses were worth in Alsace-Lorraine for those forced to sell when the territory was moved between countries? What happened to sellers of houses in Aleppo during the siege? How was business in the shops?