Bloomberg details:
More broadly, the following chart shows the improved trade budget deficit over the longer term. It looks like a case of the old "addition by the elimination of subtraction" (a greater subtraction of imports rather than improvement in exports).
Source: Census
The U.S. trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged.The chart below shows that "jump" in exports (i.e. no jump) during August.
The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said today in Washington. A rebound in auto making contributed to a jump in exports to Canada, while a drop in the number of barrels of petroleum bought abroad swamped an increase in fuel prices.
More broadly, the following chart shows the improved trade budget deficit over the longer term. It looks like a case of the old "addition by the elimination of subtraction" (a greater subtraction of imports rather than improvement in exports).
Source: Census
For your next trick let's explore the S-I=NX relationship. Seriously - when we spent more than we made we had to import the difference and finance it with borrowings. That meant Net Exports << 0. As we shift to more of a savers world, reduce aggregate debt and consume less than we make all the associated flows will reverse. Then NX>0 <=> S>I, less borrowed from abroad so $ goes up, more internal savings less pressures on R, interest rates.....
ReplyDeleteHere's the real rub....nobody gets this well enough to factor it into their investment planning.