Politicians, policymakers and even many economists who lose sleep over trade deficits just don’t get it. When it comes to trade numbers, it’s not really the size of any trade deficit that matters, it’s the story being told by the trends in exports and imports.
On November 13, the U.S. Census Bureau released the international goods and services trade numbers for September.
The key points in the release was not that fact that U.S. ran a deficit of $56.5 billion in September. Instead, it was all about the fact that both exports and imports are on the decline.
Exports hit $168 billion in July, and subsequently fell to $165.3 billion in August and $155.4 billion in September.
Imports registered $229.4 billion in July, and then declined to $224.4 billion in August and $211.9 billion in September.
The story? The trade numbers confirm a recession at home (clear from declining imports) and recessions in other nations (clear from falling exports).
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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