Record Breaking Details
- The November goods and services deficit ($68.1 billion) was the highest since August 2006 ($68.3 billion), and second highest only by a hair.
- The November goods deficit was the highest on record.
- November imports of consumer goods ($61.2 billion) were also the highest on record.
- November imports from China ($44.9 billion) were the highest since December 2018 ($45.9 billion).
- The net plus balance in services has been shrinking since a record high of $26.59 in March of 2018.
Details as noted on the chart and from Census Department Trade Data.
US consumers keep buying as exports shrink.
Trump’s Unwinnable Trade War: Gold Explains Why
Trump did not win the global trade war he started. Indeed, it is not even possible for tariffs to fix the problem.
For discussion, please see Trump’s Unwinnable Trade War: Gold Explains Why
Mish
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Well that was an easy win (for CHINA).
Not only have the middle class jobs been shipped overseas, but the fed isn’t ashamed to inflate away the money that you earn at a lower paying “service” job. They even gloat about it.
It’s not just about middle class jobs being shipped overseas. It’s also that the prosperity of corporate earnings has been distributed to the very few executives at the top of companies and not to the rest of the employees.
I exchanged emails with him over it.
The overall amount was very tiny. He says the next offering will be bigger.
Not convinced it means anything at all
So….if we’re taking about the historical pattern of trade imbalances because we import so much from China…my take is that is that US consumers have been more beneficiaries of that phenomenon than victims. Net wealth effect.
For the short run maybe it’ a leading indicator of higher unemployment…..which is certainly not good…but maybe to be expected until the pandemic starts to fade.
People should get vaccinated asap. We need to beat this virus.
Things weren’t looking terrible until the pandemic hit.
Does that mean that if the CPI under estimates inflation, which many believe, real earnings are less than in 1973, which is not so good?
CPI provides the purchasing power of the dollar not the cost of living. A classic example is the price of a car, even though it has gone up tremendously in the past two decades, CPI has a much lower index. This is because CPI uses hedonic quality adjustment, which specifies that the car you buy today is much more valuable than a car twenty years ago because of all the improvements. Problem is if you don’t want to pay for the improvements there are no cars available to you. That is why the cost of living increase is much more than CPI would estimate.
PCE inflation (the Feds gauge) is even worse because it is chained inflation gauge. Let’s say I like to eat cod, with PCE inflation if the price of cod goes up but chicken stays the same, it assumes that I will switch to chicken because it is cheaper. But I like cod! So PCE inflation ignores the quality of life of the consumer. The Cleveland Fed has a some better inflation gauges, I like median CPI link to clevelandfed.org
Thanks, that’s very interesting, I didn’t know about the hedonistic adjustments. Just goes to show that using a CPI rate to prove a point could be very misleading. Most would expect wages to at least keep up with the cost of living over 50 years.
And set to get worse…
The economy is covid/covid is the economy.
Early warning from Ireland regarding the UK variant:
Ireland 1 month ago:
Ireland today:
Ireland estimates R-number has more than doubled in 3 weeks, from 1.1-1.3 to 2.4-3
Yes, I’m afraid you’re probably right. You’re 6 to 8 weeks behind us I reckon, so mid Feb I think it’ll hit you. It’s actually affected many more young people this time. In south east England where I am it was reported that 1 in 18 have it, which is incredible considering we’ve had quite tight restrictions for a while before this recent lock down. Bring on the vaccinations.
Is this trend likely to continue?
Trade deficits don’t matter when we have the world’s reserve currency,,,backed by aircraft carriers and cruise missiles.