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Alan Tonelson's Blog
Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press). Alan Tonelson

A Spring Thaw for Manufacturing - and a Steel Recession
Wednesday, April 16, 2014
The Federal Reserve’s new manufacturing production figures were a mixed-at-best bag for domestic manufacturing.  They confirmed the role played by the harsh winter in slowing industry’s inflation-adjusted expansion to a near crawl.  But the growth that has been recovered is much slower than the rates achieved earlier in the recession.  Moreover, the new data make clear that the critical steel sector has tumbled into a technical recession.

Manufacturing production’s real monthly growth hit 0.54 percent in March, and February’s output figure was revised upward from 0.90 percent to 1.40 percent.  The new Fed data also kept January’s 0.89% drop intact.  

The data also brought manufacturing’s post-inflation year-on-year growth to 2.93 percent in March – better than the upwardly revised 2.52 percent figure for February and the 1.76 percent rate for January.  But this improvement is markedly slower than the comparable 2012-13 figures of 3.50 percent, 3.08 percent, and 3.00 percent, respectively.

As a result, inflation-adjusted manufacturing production remains 0.70 percent lower than the peak it hit just before the last recession struck – more than seven years ago, in December, 2007.

In a departure from recent trends, real nondurable goods output in March grew faster on a monthly basis than real durable goods production – 0.65 percent versus 0.44 percent.  The revised February results were more typical, with durable goods output growing 1.83 percent on month and durable goods production expanding by 0.92 percent.

March’s relatively subdued durable goods production gains were held down by a 0.81 percent monthly drop in the long torrid automotive sector.  The harsh winter’s impact on inflation-adjusted output in motor vehicles and parts has been especially striking, with production sinking by 5.88 percent in January and then rebounding by 6.87 percent in February.

In another important durable goods development, primary metals industries, including steel, fell into technical recession in March.  Real output is now down on net since last July due to a 1.46 percent monthly decrease.  USBIC defines a technical recession as six months or more of net production decline.  

Year-on-year, real durable goods output is up 4.13 percent in March – better than the 3.96 percent annual improvement for February and the 3.16 percent rise for January.  But as with manufacturing overall, all of these increases are smaller than the comparable 2012-13 production gains of 5.02 percent for March, 4.79 percent for February, and 3.89 percent rate for January.

The March data have pushed real durable goods production 5.39 percent higher than its level at the last recession’s onset.

Nondurable goods production’s 0.65 percent after-inflation March increase represented a slowdown from the 0.92 percent February increase.  But January production had dropped by 1.00 percent on month.  

Year-on-year production for nondurable goods demonstrates the same longer-term slowdown pattern displayed by the rest of domestic industry.  March real output is up 1.64 percent on year – better than the 0.92 percent and 0.20 percent improvements for January and February, respectively.  But the 2013-14 real nondurable goods growth has been slower for each of its three months than 2012-13 growth – which hit 1.82 percent, 1.19 percent, and 1.33 percent, respectively.

Real nondurable goods output is still 7.88 percent below its pre-recession peak – hit in July, 2007.

 

Fast Track's Terrible Timing
Monday, April 14, 2014
Reading through the press coverage of the big international economic meetings held this past weekend in Washington, D.C. should make anyone wonder if anyone who makes U.S. trade policy has been paying attention.  If they were, they’d realize that the heated but still-inconclusive monetary policy debate between the world’s rich and poorer countries that highlighted these meetings reveals yet another major reason to put new trade deals on ice for the foreseeable future.

As made clear once more by the assembled central bankers and finance ministers, the immediate bone of contention is the set of easy money policies followed in response to the financial crisis and Great Recession by the wealthier countries (especially the United States).  

Where trade policy is concerned, however, the issue is not whether the United States – along with Japan and the European Union – should be taking the developing countries’ concerns more seriously as they consider scaling back their unheard-of money-printing used to restore acceptable growth.  Nor is the issue whether or not the developing countries should be reacting by hoarding dollars to protect themselves from the sudden capital outflows spurred by the “tapering” of the U.S. quantitative easing (QE) policy in particular.  Instead, the issue is how this impending accumulation of dollars will affect trade flows.

The answer could not be less promising for the U.S. economy.  First, developing countries will rely even less for their growth on their own consumers’ demand.  Few have ever been net importers – or even close – from the United States largely because of their low incomes.  But more consumption-based growth and more net importing became possible when the rich countries’ easy money policies plunged their own interest rates way down, and when investment consequently raced after the higher returns offered by the riskier debt of the likes of Brazil, India, Turkey, and Indonesia.  

When the Fed declared last year that easy money’s end was in sight, however, and U.S. interest rates rebounded, investors en masse forsook the developing countries’ markets for U.S. Treasuries, and suddenly staunched the flow of cheap credit.  

Yet the trade effects of tapering – or, more precisely, of all the monetary policy uncertainty engendered by the Fed lately – will hardly end with curbing developing country consumption.  For capital outflows from these economies have been so huge, and could become so much greater, that  the national finances themselves of many now look alarmingly vulnerable.  Since they can’t borrow significantly in their own currencies if financial emergencies arise, many such governments also will need to start earning and holding on to as many dollars and other foreign currencies as they can.  Or at least that’s what they believe.  

The most obvious way to achieve that goal is ensuring that exports stay greater and/or grow faster than imports.  And conveniently, the more dollars they earn from exporting to the United States and then simply keep in their own treasuries, the weaker their own currencies become and the easier it gets to boost their trade surpluses with America much higher.

So just as much of an already weak world economy seems certain to become even less enthusiastic about Buying American, President Obama is seeking ambitious trade agreements with both European and Pacific Rim countries, along with a near-blank check from Congress to pursue them.  

The Trans-Pacific Partnership is especially worrisome.  After all, it encompasses low-income Asian countries that have long and successfully pursued mercantile export-led growth at America’s expense.  Moreover, membership for other such protectionist countries, like South Korea, Taiwan, and China, appears unavoidable.  And ongoing global monetary policy volatility – as these governments see matters – could easily make their export obsessions stronger than ever.  So it’s hard to imagine a better recipe for higher U.S. trade deficits, and therefore for slower economic growth and greater job loss, than expanding trade with this region.  

And yet with U.S. trade officials continuing to tout the TPP – and any trade expansion – as an engine of exports, growth, and hiring, it’s clear that neither the left nor the right hands of the President’s international economic policy knows what the other is doing.  As a result, it’s left to Congress to make the connections, and ensure at least minimal competence, by denying Trade Promotion Authority to Mr. Obama and keeping the deals he’s seeking off the legislative fast track.

 

Manufacturing Employment Still Stuck in the Slow Lane
Friday, April 04, 2014
The first month of manufacturing job losses since July and upward revisions for January and February created a mixed March performance for manufacturing employment.  Yet the latest government figures also confirm American industry’s status as a woeful job-creation laggard during the current recovery, with its employment gains less than 30 percent as strong as those of the total U.S. economy.  

And the question remains for Congress:  Why would anyone expect a brighter picture if lawmakers give President Obama a blank check to negotiate new trade deals with strongly protectionist Pacific Rim and European economies?

American manufacturing lost 1,000 jobs in March, according to this morning’s preliminary Labor Department data.  This dip brought industry's employment level down to 12.079 million.  Yet the Bureau of Labor Statistics also revised last month’s February’s results up from a 6,000 gain to a 19,000 gain, and January’s gain from 6,000 to 8,000.

As a result, as a share of total U.S. employment, American industrial jobs remained below the levels they reached even during manufacturing’s absolute employment nadir in February, 2010.

American manufacturing has now recouped 626,000 of the 2.293 million jobs it lost from the last recession’s onset in December, 2007 through its employment bottom in February, 2010.  

By contrast, the total, the total non-farm sector of the economy – the Bureau of Labor Statistics’ U.S. employment universe – has now regained 95.15 percent of the 8.695 million jobs it lost from December, 2007 through February, 2010.  In other words, the total U.S. jobs recovery has been more than 3.48 times stronger than the manufacturing jobs recovery.

Its weak March performance also kept manufacturing’s share of total nonfarm employment at 8.76 percent – well below even that reached at the sector's February, 2010 jobs trough (8.86 percent).

Manufacturing’s year-on-year jobs growth continues to fall as well.  Between March, 2013 and March, 2014, the sector gained only 72,000 jobs.  The comparable number for 2012-13 was 106,000 and for 2011-12, 226,000.  January’s 2013-14 manufacturing jobs increase was 79,000, and February’s was 76,000.

Manufacturing's lagging hiring gains lately show that industry’s jobs rebound earlier during the economic recovery was purely cyclical, not structural, and that contrary to President Obama and others, no structural domestic manufacturing renaissance is in sight.

 

Germany's Trade Surpluses Now Under Fire from...Germany's Own Government
Monday, March 24, 2014
Although it hasn’t made the same kind of news (at least in the U.S.) as American complaints about China’s persistent trade surpluses, Washington has been grousing about Germany’s lopsided trade flows for several months.  In fact, in its latest semi-annual report on foreign currency manipulation, the Obama Treasury Department arguably used harsher language criticizing Germany’s trade imbalances than that employed to chide China.  

Some analysts have even gone so far as to accuse Germany of engaging in stealth currency manipulation – supporting monetary and other European Union economic policies that have conveniently kept the Euro much weaker than a German national currency would be if the euro was dropped.

Berlin has responded even less favorably to these charges than Beijing.  At least China pays lip service to the idea of rebalancing its economy away from exports, and its surpluses as a share of the Chinese economy have fallen considerably because of the post-financial crisis slump in world growth and trade.  (Germany's just rebounded to match its all-time record.)  But Chancellor Angela Merkel reacted to the Treasury report specifically by accusing critics of export envy and “absurdly” asking Germany to reduce its competitiveness.  

Now, however, it turns out some of those critics can be found in Merkel’s own government.  In late February, Berlin’s State Secretary for Europe agreed that surplus countries like Germany have obligations to rebalance their economies and even said that "Through the growing low wages sector and increase in flimsy employment contracts we have created an unfair advantage compared to our partner countries [in the European Union]."

In early March, the German Minister for Economics and Energy promised that his government would respond to European Union calls for smaller surpluses with measures including “increased employment, the introduction of a minimum wage, orientation of part-time and temporary work on their core purposes, appropriate conditions for a responsible wage policy and strengthening investment."

If anything, racking up trade surpluses is even more deeply ingrained in Germany’s economic DNA than in China’s.  And promises by surplus countries to rebalance are a lot more common than meaningful follow-through.  But one thing's certain:  The next time Washington or anyone else urges Germany to mend its ways on trade, efforts by Berlin to scapegoat foreigners shouldn't even pass the laugh test.

 

Weather-Related Gyrations Leave Manufacturing a US Growth Laggard
Monday, March 17, 2014
New Federal Reserve figures show a weather-related bounce-back in February manufacturing production from January’s weather-induced swoon.  But industry’s year-on-year growth remains considerably slower than that of the rest of the weakly recovering overall economy.  

In fact, manufacturing production remains more than two percent lower than its pre-recession peak – more than six years ago.  Here are the highlights of this morning's industrial production release:

>Manufacturing production’s monthly inflation-adjusted growth hit 0.8 percent in February following January’s downwardly revised 0.9 percent drop.  The new industrial production figures also revised December’s real manufacturing expansion down from 0.3 percent to 0.2 percent.  

>As a result, manufacturing’s post-inflation year-on-year growth totaled 1.64 percent in February – better than January’s 1.47 percent but considerably lower than the 2.46 percent real increase in manufacturing production between February, 2012 and February, 2013.

>The overall U.S. economy grew by an estimated 2.40 percent (annualized) in the government’s latest data for the fourth quarter of 2013 – significantly faster than these latest manufacturing production figures.

>Inflation-adjusted manufacturing production remains 2.33 percent lower than the peak it hit just before the last recession struck – more than six years ago, in December, 2007.

>Real durable goods production growth grew 0.9 percent on month in February after falling by 0.8 percent in January.  

>Both the January monthly drop in real durable goods output and the monthly rebound in February were led by the automotive sector – whose 5.18 percent January production plunge was followed by a 4.83 percent February jump.

>Year-on-year, real durable goods output is up 2.67 percent in February – lower than both the comparable 3.01 percent rate for January and the 3.89 percent rate between February, 2012 and February, 2013.

>Real durable goods production is still 3.19 percent higher its level at the last recession’s onset.

> Nondurable goods production increased by 0.7 percent after inflation in February 2013 after falling by 1.1 percent in January.  February year-on-year real durable goods output improved by 0.5 percent – better than its 0.2 percent year-on-year decrease in January  but worse than its 0.9 percent expansion between February, 2012 & February, 2013.

>Real nondurable goods output is still 8.92 percent below its pre-recession peak – hit in July, 2007.

 

New Import Price Figures Underscore Need to Fight Currency Manipulation
Thursday, March 13, 2014
Both the new fast track trade bill and the President’s plans for a Trans-Pacific Partnership (TPP) trade deal with Japan and other Asian protectionists continue to ignore currency manipulation. But today’s February import price data once again show that Tokyo’s weak yen policy continues unabated, along with China’s deliberate undervaluing of the yuan.  

Consequently, the new figures also make clear that, without strong, enforceable counter-measures from Washington, both the TPP and expanded U.S.-China trade will keep slowing America’s still-feeble recovery, undercut its job-creation, and further fuel its trade deficits and national debt.

Prices of Japan’s manufactures-dominated exports to the United States fell 0.1 percent in February on a monthly basis.  By contrast, prices of all U.S. manufactures imports rose 0.3 percent in February.

Since the launch of Japan's "Abenomics" economic policy measures and its yen-weakening policy began in January, 2013, prices of Japan’s exports to the United States have fallen by 3.70 percent.  Prices of all manufactures exports to the United States are down only 1.02 percent during this period – about 75 percent less.

According to the latest (January) U.S. trade data, the manufacturing-dominated U.S. trade deficit with Japan is down 12.61 percent on a monthly basis since this latest phase of Japanese currency manipulation began.  Although the U.S. global manufacturing deficit is down only 1.26 percent during this period, the import price data indicate that Japan’s performance would have been considerably worse without the artificially cheap yen.

Import prices from China rose 0.2 percent February month-to-month – also less than the rise for all manufactures imports in February despite continued widespread reports of rapid increases in wages and other manufacturing costs in China.

Year-on-year, prices of Chinese imports are falling more slowly than those of overall manufactures imports (-0.40 percent versus -1.10 percent) – which may at least partly explain why the Chinese government recently has allowed the yuan’s value versus the dollar to start falling again..  Moreover, the China lag unmistakably stems in part from the inclusion of rapidly falling Japanese prices in the overall totals.

Chinese import price (and wage) trends also partly reflect the ongoing shift in the make-up of China’s exports from lower-priced labor-intensive products to more expensive high-value manufactures.

These prices have not risen on net since July, 2011.  As a result, claims that China is becoming priced out of U.S. and world export markets, and that U.S domestic manufacturing is bouncing back largely as a result, look positively delusional.  

 

A Step (or Two) Backward for Manufacturing Hiring
Friday, March 07, 2014
Trivial gains in February and downward revisions for December and January show that the modest manufacturing job recovery touted by President Obama has completely stalled out.  

In fact, domestic industry has now re-created 10,000 fewer jobs over the last four years than last month’s employment report indicated.  If the President wins fast track trade negotiating authority and secures more deficit-boosting trade deals, downward pressure on manufacturing employment will surely intensify.

American manufacturing gained only 6,000 jobs in February.  Moreover, the 21,000 manufacturing job improvement reported by the Bureau of Labor Statistics for January was revised down to 6,000, while the December increase was revised down from 8,000 to 6,000.  

As a result, whereas the January employment report showed that manufacturing had regained 622,000 of the 2.293 million jobs it lost from the last recession’s onset in December, 2007 through its employment nadir in February, 2010, today’s figures revised that gain down to 612,000.

In addition, the revisions make clear that manufacturing created only 88,000 jobs in 2013 (December to December) – down from 167,000 in 2012 and 206,000 in 2011.

The new totals reinforce manufacturing’s status as a major recovery jobs laggard.  The regained jobs represent only 26.67 percent of those lost during the recession. By contrast, the total non-farm sector of the economy – the Bureau of Labor Statistics’ U.S. employment universe – has regained 92.51 percent of the 8.695 million jobs it lost from December, 2007 through February, 2010.  In other words, the total U.S. jobs recovery has been nearly 3.47 times stronger than the manufacturing jobs recovery.

This weak performance keeps pushing down manufacturing’s share of total nonfarm employment. In February, the level hit 8.76 percent – well below even that reached at the sector's February, 2010 jobs trough (8.86 percent).

Manufacturing’s year-on-year jobs growth continues to fall as well.  Between February, 2013 and February, 2014, the sector gained only 61,000 jobs.  The comparable number for 2012-13 was 145,000 and for 2011-12, 206,000.  January’s 2013-14 manufacturing jobs increase was 77,000.

Manufacturing's lagging hiring gains lately show that industry’s jobs rebound earlier during the economic recovery was purely cyclical, not structural, and that contrary to President Obama and others, no structural domestic manufacturing renaissance is in sight.

Moreover, if history is a guide, the kinds of new trade agreements President Obama could complete with fast track negotiating authority from Congress will put further downward pressure on manufacturing job creation.

 

New GDP Report Further Weakens the Case for Fast Track
Friday, February 28, 2014
This morning, the government released its second set of fourth quarter 2013 and full-year 2013 gross domestic product figures.  (The first came out last month, and the final - for now - will be issued next month.)  Here are the highlights regarding America's trade performance and its impact on economic growth -- which further weaken the case for Congress awarding the President sweeping authority to pursue new deals:

>Today’s new GDP figures show that trade’s overall contribution to economic growth during the fourth quarter of 2013 and for the full year was slightly less than indicated by last month’s advance fourth quarter estimate.  They also again make clear that all of the recent improvement in U.S. trade deficits and additions to growth – and then some – has stemmed from dramatic improvements in America’s energy trade flows.

>Since energy trade flows have no significant relation to trade deals or trade policy, their gains do nothing to strengthen the case for granting President Obama fast track authority to negotiate new trade deals, or for supporting the agreements his administration is seeking.  In fact, the continued worsening of the non-energy deficit, which is influenced by trade deals, indicates that the President does not deserve a Congressional blank check.

>This worsening of the overall and non-energy trade deficits during the recovery also continue to slow a growth and job-creation performance that remain far too weak.  Worse, virtually all of the economic damage inflicted by widening trade deficits comes in the private sector – which of course represents the economy’s most important engine of healthy, sustainable growth and hiring.

>The new fourth quarter figures show that the inflation-adjusted U.S. trade deficit totaled $382.8 billion on an annualized basis, not the $370.1 billion reported in the first estimate.  The comparable third quarter reading was considerably higher: $419.8 billion.

>As a result, trade contributed 0.99 percentage points to the fourth quarter’s overall real growth reading of 2.40 percent on an annualized basis – compared with the advance estimate’s 1.33 percentage point trade contribution to overall real annualized growth of 3.20 percent.  Therefore, trade accounted for 41.25 percent of the fourth quarter’s real economic growth, not the 41.56 percent originally reported.  That’s markedly better, though, than trade’s performance in the third quarter, when it produced only 0.14 percentage points to the 4.10 percent overall annualized growth figure (3.41 percent).

>For 2013 as a whole, the inflation-adjusted trade deficit hit $412.3 billion – 4.29 percent lower than the $430.8 billion figure for 2012.  According to the newest GDP figures, however, this smaller trade deficit contributed 0.12 percentage points to the economy’s 1.90 percent overall growth, not the 0.14 percentage points reported last month.  Although that’s a smaller growth boost in absolute terms than 2012’s 0.10 percentage point addition to 2.80 percent overall growth, it’s larger in percentage terms.

>Since the recovery began in mid-2009, however, the worsening of the trade deficit has shaved the cumulative inflation-adjusted American economic expansion by 1.44 percent – up from the 0.62 percent loss figure yielded by last month’s advance GDP report.

>This figure is small -- but overall growth has been meager as well.  Moreover the figure would be much bigger without the dramatic recent reduction in the U.S. oil trade deficit – which again is unrelated to American trade agreements or trade policy.  

>Since 2011, for example, the U.S. inflation-adjusted petroleum trade deficit has fallen by $50.13 billion (from $182.10 billion to $131.97 billion).  But the merchandise deficit excluding oil – which is heavily influenced by trade agreements – has worsened by $64.49 billion (from $428.53 billion to $493.02 billion) during this period.  

>Since the first quarter of 2009, U.S. inflation-adjusted exports have increased by only 34.44 percent.  This performance means that the nation is only slightly more than a third of the way toward meeting the President’s goal of doubling exports from that time through the end of 2014.  And only four data quarters are left to boost that percentage to 100.


 

Job Gains for Manufacturing but Sector Remains a Recovery Employment Laggard
Friday, February 07, 2014
The government's January jobs report just came out this morning and here are the higlights for manufacturing:

Industry gained 21,000 jobs in January, registering its third 10,000-plus employment improvement in the last four months and contrasting notably with a second straight disappointing hiring performance for the overall nonfarm economy.  (All figures presented on a seasonally adjusted basis.)

December's manufacturing jobs gain was revised downward from 9,000 to 8,000, but November’s figure was revised upward from 31,000 to 35,000.

Manufacturing, however, remains a major jobs laggard during the present recovery. The sector has regained only 27.12 percent (622,000) of the 2.293 million jobs it lost from the onset of the recession in December, 2007 through its jobs nadir of February, 2010. By contrast, 90.21 percent of the 8.695 million nonfarm jobs lost during that period have been regained – a performance more than 3.3 times better than manufacturing’s.

Because of this relatively slow growth, manufacturing’s share of total nonfarm employment in January actually ticked down month-on-month -- from 8.79 percent in December to 8.78 percent.  This level is well below even that reached at the sector's February, 2010 jobs trough (8.86 percent).

The nondurable goods sector, which represents nearly half of all U.S. manufacturing, ended its jobs recession in January, but still has not created a single net new job since last February.  An economic recession is defined as two straight quarters of GDP contraction.  USBIC defines a job recession as two or more consecutive quarters of cumulative decline.

Manufacturing’s year-on-year jobs growth continues to trend down.  Between January, 2011 and January, 2012, 217,000 net new jobs were created in manufacturing.  Between January, 2012 and January, 2013, this figure fell to 145,000.  Since January, 2014, manufacturing has created only 93,000 net new jobs.  

Manufacturing's lagging hiring gains lately show that industry’s jobs rebound earlier during the economic recovery was purely cyclical, not structural, and that contrary to President Obama and others, no structural domestic manufacturing renaissance is in sight.

Moreover, if history is a guide, the kinds of new trade agreements President Obama could complete with fast track negotiating authority from Congress will put further downward pressure on manufacturing job creation.
 

No Good News for Fast Track Backers in New GDP Figures
Thursday, January 30, 2014
Today’s new GDP figures show that trade’s overall drag on economic growth shrank during the fourth quarter of 2013 and for the full year, but that all of the improvement – and then some – has stemmed from dramatic improvements in America’s energy trade flows.

Since energy trade flows have no significant relation to trade deals or trade policy, these gains do nothing to strengthen the case for granting President Obama fast track authority to negotiate new trade deals, or for supporting the agreements his administration is seeking.

In fact, that majority of U.S. trade flows outside the energy sector, which are greatly influenced by current trade policies and existing deals, keep generating ever bigger deficits – meaning that they keep slowing an American recovery and job-creation performance that remain far too weak.

Worse, virtually all of the economic damage inflicted by widening trade deficits comes in the private sector – which of course represents the economy’s most important engine of healthy, sustainable growth and hiring.

In the fourth quarter, trade contributed 1.33 percentage points to the preliminary overall real growth reading of 3.90 percent on an annualized basis.  Therefore, trade accounted for 41.60 percent of U.S. inflation-adjusted growth in late 2013.  That’s markedly better than trade’s performance in the third quarter, when it produced only 0.14 percentage points to the 4.10 percent overall annualized growth figure (3.41 percent).

For 2013 as a whole, the improvement in the trade deficit contributed 0.14 percentage points to economy’s 1.90 percent inflation-adjusted expansion (7.37 percent).  In 2012, a lower trade deficit contributed only 0.10 percentage points to that year’s 2.80 percent growth (3.57 percent).
>Since the recovery began in mid-2009, however, the worsening of the trade deficit has shaved the cumulative American economic expansion by 0.62 percent.

This figure is small, but it would be much bigger without the dramatic recent reduction in the U.S. oil trade deficit – which is unrelated to American trade agreements or trade policy

Using the latest oil trade figures, since 2011,   on a January-November basis, the U.S. inflation-adjusted petroleum trade deficit has fallen by $45.83 billion (from $167.86 billion to $122.03 billion).  But the merchandise deficit excluding oil – which is heavily influenced by trade agreements – has worsened by $59.94 billion (from $389.85 billion to $449.79 billion) during this period.  

If that share of the trade deficit shaped by trade agreements – such as President Obama’s bilateral deal with Korea – keeps growing, and thus slowing the recovery and job creation, Congress will be hard pressed to justify granting the President sweeping new authority to negotiate more of these deals.

Since the first quarter of 2009, U.S. inflation-adjusted exports have increased by only 35.07 percent.  This performance means that the nation is only slightly more than a third of the way toward meeting the President’s goal of doubling exports from that time through the end of 2014.  And only four data quarters are left to boost that percentage to 100.

Nonetheless, changing U.S. trade flows to boost growth and job-creation on net requires much more than increasing exports per se.  Net exports must rise, meaning that the chronic U.S. trade deficit must shrink.  Since Mr. Obama has assumed office, this trade shortfall has moved in exactly the opposite direction.

 

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