Dismal Trade Report for April

The June 4 trade report was dismal in every way.  U.S. exports fell, imports rose, and net exports (exports minus imports) reached their lowest level in two years, down from a negative $44.2 billion in March to a negative $47.2 billion in April. Worsening net exports are a huge drag on the U.S. economy. During the first quarter (January through March 2014), they contributed a negative 0.9% to real GDP, accounting for almost the entire 1.0% fall in real GDP. The April trade statistics are even worse. Apparently, the drag of worsening trade deficits upon U.S. economic growth is continuing.  There are at least four trends contributing to falling U.S. net exports: 1. Slowing world economic growth. Falling U.S. exports usually indicate slowing world economic growth. On November 29, we predicted just such a slowdown. The robust world economic growth predicted by others for 2014 has yet to materialize. 2. Quantitative Easing. The Federal...(Read Full Post)

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