As reported yesterday by the Bureau of Economic Analysis, the U.S. trade deficit improved in September, dropping to $41.6 billion – the lowest level since December, 2010. (See above link.) The report cites a $5.4 billion increase in exports as one of the main reasons for the improvement.
This all sounds like very good news until you look into the details. Yes, exports rose. But an increase in exports of food and oil account for the bulk of the increase. In fact, exports hit a record in both categories. Exports of manufactured goods rose by $2.1 billion. However, that figure was swamped by an increase of $3.6 billion in imports of manufactured goods. The net result was yet another worsening of the trade deficit in manufactured goods, continuing its steady downward trend. Here’s the chart: Manf’d Goods Balance of Trade. It’s not a pretty picture and it explains why jobs in the manufacturing sector have been stagnant at best for over a year now.
The overall rise in exports wasn’t enough to put us back on track for meeting the president’s goal of doubling exports in five years. Exports lagged the goal for the 14th consecutive month. Here’s the chart: Manf’d exports vs. goal.
Perhaps the best evidence that the president’s plan to double exports in five years (the real goal being the doubling of manufactured exports, since that’s where the jobs are) is that, in the past 13 months, exports in that category have risen by only $1 billion. To keep pace with a plan to double them, they should have risen by $16 billion in that period. During that same period, manufactured imports rose by $6 billion. In other words, the manufacturing sector of our economy has contracted by $5 billion per month in the last 13 months, thanks to the president’s failure to take action on our trade policy failures.