Trade Numbers Send Mixed Signal on the Economy

The U.S. Bureau of Economic Analysis issued the export and import numbers for November this morning. Like other data, these trade numbers offer a mixed view on the economy.

As for the good news, exports grew for the third straight month. Of course, though, U.S. exports have still not recovered to reach the peak hit way back in July 2008.

On the import side, the news was more cautionary. While imports grew in November, they still fell in three of the last five months, and were down by more than 1 percent compared to where they were in June (seasonally adjusted). This recent slight downward move in imports at least in part reflects continued sluggishness in the domestic economy. After all, a growing domestic economy means increased import purchases made by both consumers and businesses.

And over the longer haul, as is the case with exports, imports remain below the high registered in July 2008.

In the end, what matters when it comes to trade data is not the size of the trade deficit. Instead, it’s about the trend in terms of both exports and imports. That story remains mixed.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council