Advance Indicators
This morning the Census bureau reported on Advance Economic Indicators for August.
- Advance International Trade in Goods: The international trade deficit was $82.9 billion in August, up $2.8 billion from $80.1 billion in July. Exports of goods for August were $118.3 billion, $3.2 billion more than July exports. Imports of goods for August were $201.3 billion, $6.0 billion more than July imports.
- Advance Wholesale Inventories: Wholesale inventories for August, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $637.0 billion, up 0.5 percent (±0.2 percent) from July 2020, and were down 5.0 percent (±0.7 percent) from August 2019. The June 2020 to July 2020 percentage change was revised from down 0.3 percent (±0.2 percent) to down 0.1 percent (±0.2 percent).
- Advance Retail Inventories: Retail inventories for August, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $599.7 billion, up 0.8 percent (±0.2 percent) from July 2020, and were down 10.1 percent (±0.5 percent) from August 2019. The June 2020 to July 2020 percentage change was unrevised from the preliminary estimate of up 1.2 percent (±0.2 percent).
Goods vs Econoday Consensus
The US goods deficit (census basis) is expected to deepen to a very large $82.6 billion in August versus $81.2 billion in July (revised from $79.3 billion). Goods imports were down 7.4 percent year-over-year in August and were down 0.9 percent relative to February; goods exports have been falling more steeply, down 15.7 percent on the year and down 16.4 percent versus February.
The deficit was a bit larger than expected but the economists got this one essentially correct.
Goods and Services
The advance report only covers goods. The above chart shows goods and services through July.
Since the US generally runs a surplus in services, the net impact will be less than today’s report of -82.9 billion.
However, the total deficit is sure to get worse.
Promises Promises
Trump pledged to shrink the deficit. Instead it’s heading towards the depths of the Bush and Obama years.
Also note that trade deficits tend to shrink in recessions. Instead, it widened.
Mish
Mish, some time ago, if I understood you correctly, you posted that if the US runs a Fiscal deficit, it has to eventually run a trade deficit. This seems to be a consequence you expected. Even aside from that, it’s not surprising. Massive fiscal stimulus kept spending high, and most spending is on goods made overseas. Thus, high fiscal stimulus is going to lead to high trade deficits, one way or the other.
I’ve been thinking about this one all day….and what occurs to me is that it was fairly stupid in the first place…..to think that the trade wars were going to ever reduce trade deficits…..
Like you could wave a magic wand and reverse more than 30 years of shifting towards global trade…and like all the investments the multi-nationals made in China were suddenly going to not matter anymore?
I once considered Peter Navarro to be a smart guy…..I read his books on trading maybe 20 years ago. Something like that. When Trump announced he was bringing in Navarro…I thought it was a bright spot…..since all his cabinet picks seemed to be from a list he got from Charles Koch..but Navarro has not impressed me. Just another sycophant these days trying to lay down cover for The Donald’s latest stupid tweets.
There is a difference between complaining about China…and actually doing something about the problems.
There is a lot of ingenuity still in this country…..maybe we figure out how to find new markets and new products…..but trade won’t come from throwing tantrums and grandstanding. It will come from doing things and making things other countries can’t do..or doing them cheaper and better.
Non-sycophants don’t survive in this administration. They may or may not be trying to moderate his insanity, but the big orange butt must be kissed.
To win in any competition, you need to focus on your strengths, and try to avoid your weakness. The main strengths in the US are innovation, ability to attract best talents from the whole world, financial engineering, and reserve currency printing. Low and middle tier manufacturing does not belong to the US anymore.
I worked for a small high volume machine shop most of my life. It was fairly large in our sector with 3 plant locations in the SE and we employed about 350 people at our peak. We served major companies in the commercial, industrial and defense industries. Our company was in business for over 70 years. Although we were competitive in the US, we started losing work to Korea, Mexico, China and India. All of the high volume, profitable jobs were sourced overseas, leaving us with smaller volume work and much of it for smaller companies. Our choice was to downsize significantly and invest upwards of $10 million on new equipment that would be more suitable to shorter runs. With no heirs for the owners, it was considered a losing proposition and doors were closed in 2011. Lots of workers had difficulty in picking up other positions in the communities where we were located. “Learn to code”?
In my opinion, if everything in this wide world of ours go down to the lowest common denominator of pricing (The World is Flat mentality), everybody will be making $2/hr. I got that perception when talking to the purchasing manager of Fortune-500 company that told me to my face that our firm’s quality was better than their in-house production capabilities and that our pricing was competitive with any firm in the USA. That being said, they decided to source the work in India due to their more competitive pricing. It is a dog-eat-dog world out there.
Not everybody or firm can adapt and change. That will leave a lot of people unemployed, especially with the onslaught of automation. What will become of those unfortunate souls? Things that you thought could never be automated or run by computer are happening at this moment.
Every country moving up the value creation chain has been facing the type of problems that you described. Moving up the chain is how you make more than other people/countries. US is at the very top of the value chain, and created mountains of wealth from it. USA as a whole is much richer now than before. The main problem is that only the top 1% richest got most of the newly created wealth. The key problem is thus how to re-distribute the wealth among the population such that the less fortunates also get their pieces of cakes.
What do you expect from an Artist of Serial Bankruptcies and a Stable Genius of the Greatest Conman-ship?
…and the “Trump deficit” has nothing to do with the manufactured Covid response being used to kick start the Great Reset green socialist agenda – https://www.armstrongeconomics.com/?s=great+reset+report
How long before we find out the tariff money actually went straight from the US treasury into Trump’s bank account ?
The only people who believe Trump’s lies are his zombie cult members. They will be back in November voting for the guy who despises them as losers. Talk about low self esteem voters lol
Are we winning yet?
Regarding long comments and getting logged out
Replay from the Maven:
For the first issue with longer comments, it sounds like his browser is refreshing automatically, causing his comments to disappear. I wasn’t able to reproduce this on my end when typing a longer comment directly into the comment box over a 10 minute period, so it might be something he has installed or dependent on the type of browser he’s using. Could you have him open the site in incognito mode and see if that gets rid of the problem? If it does, there’s likely something installed in his browser like an add-on causing this to happen. This could also be a cache-related problem though, so I would suggest clearing the cache as well to be sure.
For the second issue (getting logged out after every comment), do you know which browser they are using? Many browsers have an option to automatically log out users from certain sites when they close tabs or browser windows to protect their login information and it sounds like that’s what’s happening here. If they’re using Chrome, they can make sure that these settings are disabled by clicking the three dots in the upper right corner of their browser and selecting “Settings” to go to the Settings page. Then click “Privacy and Security” in the menu on the left side of the page and select “Cookies and other site data”. Ensure that “Allow all cookies” is selected and make to disable “Clear cookies and site data when you quit Chrome” and “Send a ‘D Not track’ request with your browsing traffic”. Also, make sure thestreet.com and thestreet.com/mishtalk are not in the lists at the bottom of the page titled “Always clear cookies when windows are closed” and “Sites that can never use cookies”. If they’re using a different browser, similar settings should be available. If those settings are already set up correctly, could you have them try clearing their cache and cookies for the site?
I’ve had short posts disappear on me as well.
I have had this happen twice. Both time I was on Firefox, and yes, I have some odd addons, including Noscript, Adblock+,and Ghostery. The two instances were on different computers, but both had the same addons. In both cases I was logged in when I began typing, and suddenly my window refreshed, and I was logged out, for no apparent reason, and the text I had typed in was gone. I logged back in, and re-typed essentially the same thing, and posted it, no problem.
If it happened often, it would be annoying, but it’s only been twice, so I didn’t worry too much about it. I’m currently using Opera, and haven’t had it happen with Opera (yet).