The BEA (Bureau of Economic Analysis) released the August results for international trade in goods and services this morning. As is always the case, the headline number gets all the attention and the headline number was good – the trade deficit declined to $30.7 billion in August, down from a revised $31.9 billion in July and a bit better than expectations for a rise to $33.0 billion. Let the party begin!
But the news for American workers isn’t good. All of the decline (and more) is explained by a reduction in oil imports and a tiny increase in the services surplus. (“Services” are largely paperwork transfers of money that involve few jobs.) The bad news is that the deficit in non-petroleum goods – in other words, manufactured products (where all the jobs are, or rather were) – actually rose by $0.7 billion to $24.3 billion, the highest level since Jauuary, when international trade was in significant decline as a result of the economic collapse. (See exhibit 9 on page 14 of the BEA report, link provided above.)
And our cumulative trade deficit, since our last surplus in 1975, has now topped $9.6 trillion (in current dollars).
If the Obama administration and congressional leaders are looking a way to reduce our soaring unemployment, fixing our misguided trade policy would be the perfect place to start.