The Department of Commerce released the April figures for international trade in goods and services this morning, and the trade deficit rose again to its worst reading since January – $47.6 billion. Imports were up and exports were down. But you can’t even find the worst news in the report – the deficit in manufactured goods. The Commerce Department doesn’t even bother to calculate it. But I do. By subtracting from the overall deficit the figures for services, foods, feeds, beverages and petroleum products, you can arrive at a pretty good estimation of trade in manufactured goods. The news is bad. The deficit in manufactured products rose to $63.4 billion, beating the previous record set in March, 2015 by $0.1 billion. Imports rose to a record level and exports fell to their lowest level in five months. Here’s a chart: Manf’d Goods Balance of Trade. As you can see, the deficit in manufactured goods continues to worsen at the same pace that it has since 2010, more than doubling in seven years.
Separately this morning, the Bureau of Labor Statistics released a weak employment report for the month of May. Unemployment dropped, but thanks only to the old “mysteriously vanishing labor force” trick used so often during the Obama administration. The employment level actually fell by 133,000 workers. An accurate reading of unemployment would have had it actually worsening by two tenths of a percent. Manufacturing employment fell yet again by another 1,000 jobs. No surprise, in light of what’s happening with the trade deficit. Add this data to the extremely weak first quarter GDP and you have a picture of an economy that’s stalled and might be on the brink of something worse.
So President Trump now owns the worst performance in manufactured goods of any president. He vowed to “Make America Great Again.” The first step in that process is to stop it from getting worse. That hasn’t happened yet. Talk and optimism will only carry you so far. There’s been little action. There’s no border tax. NAFTA still stands. Jobs are still heading to China and Mexico.
To be fair, it’s still early in his administration, and the Republican congress has done nothing either. But I fear that the opportunity to “make America great again” is being frittered away.