Exports of U.S. manufactured goods rose by $3.5 billion in November to a record level of $115.4 billion. Unfortunately, imports of manufactured goods offset much of that increase, rising $1.8 billion. That, coupled with a $1.4 billion decline in petroleum exports, left the trade deficit for November nearly flat at $43.4 billion. That’s worse than expectations and will drag on 4th quarter GDP.
Still, it’s interesting that this report came on the same day as the announcement that the economy added 321,000 jobs in November, including 28,000 jobs in manufacturing – the first decent increase in many months. This is just a tiny taste of what would happen to our economy if we got our trade policy right and restored a balance of trade. If a $3.5 billion boost in manufactured exports has this kind of effect, imagine the impact that a $50 billion improvement would have (the amount it’d take to restore a balance of trade in manufactured goods).
Unfortunately, this November number is clearly just a tiny upward blip in the steep downward trend in manufacturing in the U.S. Look at this chart of our balance of trade in manufactured goods and tell me that November is evidence of some sort of rebound: Manf’d Goods Balance of Trade.
By the way, the November increase in manufactured exports still leaves us $50.4 billion short of Obama’ goal to double exports by January of ’15. In other words, if the president had actually taken any action on trade policy to make it happen, our economy would now be enjoying the kind of explosive rebound that I suggested above that you could only imagine.