After clicking the following link, click the “investor’s calendar” link on the left side of the page. Then go to the release of the Philadelphia Fed Survey on Thursday, January 17th.
Wow! I like being right, but not this right! A couple of months ago, as the decline of the dollar was well underway, economists predicted that this would lend support to manufacturing, because it would make American-made goods cheaper (relative to the competition) in the global marketplace. I disagreed, predicting that it would make little or no difference because the trade deficit is not a function of cost, it is a function of population density and lower per capita consumption in highly populated nations.
This report makes clear that, not only is manufacturing not growing but the decline is accelerating. It is falling off of a cliff, figuratively speaking! (And check out the graph of the 4-year trend at the bottom of the article.) Is it possible that the trade deficit is eroding our economy at a rate even faster than I would predict? Stay tuned!