December 4, 2013: Familiar trade deficit doldrums
So yesterday, we got a new PMI (Purchasing Managers Index) number, another monthly data point that helps measure the strength of America’s productive economy. This Friday, we’ll get important set of data when the Bureau of Labor Statistics releases new jobs numbers. But today? Today we get the trade figures from the Commerce Department. So how we doin’ with those deficits, America?
Well, it’s more of the same. The trade gap shrank to $40.6 billion in October. That’s down from $43 billion the month before, mostly on the strength of American oil exports, notes Bloomberg’s Victoria Stilwell.
But this is like putting out fires on the Titanic. Despite rising exports, we still import more than ever before, which kind of negates the strength of our exports -- we’re still sending large amounts of wealth overseas. A huge chunk of that $40.6 billion total came from our warped trading relationship with China, which rang in at $28.9 billion. This is after an all-time record $30.5 billion monthly trade deficit last month, and it puts America on pace to surpass 2012 record $315 billion deficit with Beijing.
Deficits, deficits, and more deficits. The unemployment report comes out Friday, everybody. Will America get any more decent manufacturing jobs? Keep an eye out for our updated #AAMeter.
Elsewhere around the web:
Speaking of China: Uncle Joe is visiting, and that’s good. Vice President Biden, the one-man diplomatic band that everyone likes, is a big hit there. He’s in the midst of meetings with Chinese Premier Xi Jinping. His visit was supposed to be a trade mission (where he’d maybe talk about our incredibly uneven trade balance), but, writes Bob Davis for the Wall Street Journal, it looks like he’s going to try to soothe tensions that have arisen from China’s newly declared air defense zone.
Here’s the take from Alliance for American Manufacturing (AAM) President Scott Paul:
We’re right to complain about an air defense zone. But if we want China to know that we’re serious about challenging its aggressive behavior, we need to change our economic policies that have enabled it. Unfortunately, limiting our trade deficit with China seems to have fallen off of everyone's radar, including the Administration’s.
The city of Detroit has entered Chapter 9 bankruptcy, per U.S. Bankruptcy Judge Steven Rhodes. Now the big work begins. Nathan Bomey, Brent Snavely and Alissa Priddle have the story for the Detroit Free Press:
The landmark ruling ends more than four months of uncertainty over the fate of the case and sets the stage for a fierce clash over how to slash an estimated $18 billion in debt and long-term liabilities that have hampered Detroit from attacking pervasive blight and violent crime.
Detroit should serve as a cautionary tale for the rest of the country. AAM President Scott Paul mentioned in a Huffington Post opinion earlier this year that “the gravest mistake we can make today is to believe that Detroit is an anomaly.” So how do we prevent more Detroits? A manufacturing strategy. More from Paul:
Nations with a manufacturing strategy have a greater percentage of their economy and employment in industry than we do in America today.
In many cases, our competitors now have a stable or growing middle class and fewer budget challenges than our own cities, states, and federal government.
What do they know that we don't? Manufacturing matters.
Say it one more time, and remember it: Manufacturing matters.
Interesting. Top aides to President Obama, along with Commerce Secretary Penny Pritzker, met with chief executives from a number of American manufacturing companies yesterday. While the meetings indicate an interest in the solvency of the manufacturing companies, American jobs are not necessarily a given. AAM will be watching closely to see how these relationships are leveraged into jobs here in the United States, which, as we mentioned yesterday, is clearly the top priority of voters. Stay tuned.
It’s gift-giving season, America. While you’re out there doing your holiday shopping, whether in-person or online, your pals at AAM hope you keep your purchases Made in the U.S.A.
Why? AAM President Scott Paul said it thusly:
We consume too much from overseas, and we don’t produce enough here to make up the difference. That burdens us with debt and leaves us with fewer jobs. There is a solution and it may sound quaint, but it’s never been truer than it is today: Buy American.
Easier said than done? Not if we help you out! We’ve posted a list of 51 American-made gifts suggestions, one from every state (and the District of Columbia). Throughout the month of December we’ll continue providing you with ideas, tips, and tricks. So check out our Holiday page often, as we’ll update it frequently.
Have an American-made gift that you’re giving, or coveting? We want to hear about it. Tweet it to @KeepItMadeinUSA or email us: info [at] aamfg [dot] org.
Happy Hump Day, America!
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