Dear tariff fans (both parties), let’s check in on how we are doing.
The Advance Economic Indicators for May are headed in the wrong direction.
Advance International Trade in Goods: The international trade deficit was $100.6 billion in May, up $2.7 billion from $98.0 billion in April. Exports of goods for May were $166.7 billion, $4.6 billion less than April exports. Imports of goods for May were $267.3 billion, $2.0 billion less than April imports.
Advance Wholesale Inventories: Wholesale inventories for May, adjusted for seasonal variations and trading day differences, but not for price changes, were estimated at an end-of-month level of $901.6 billion, up 0.6 percent (±0.2 percent) from April 2024, and were down 0.5 percent (±0.7 percent) from May 2023. The March 2024 to April 2024 percentage change was revised from up 0.1 percent (±0.4 percent) to up 0.2 percent (±0.4 percent).
Advance Retail Inventories: Retail inventories for May, adjusted for seasonal variations and trading day differences, but not for price changes, were estimated at an end-of-month level of $796.8 billion, up 0.7 percent (±0.2 percent) from April 2024, and were up 5.0 percent (±0.7 percent) from May 2023. The March 2024 to April 2024 percentage change was unrevised from the preliminary estimate of up 0.7 percent (±0.2 percent).
Adding to Inventory
Why wholesalers and retailers are adding inventory in a clearly weakening economic environment is a mystery.
Advance Trade Since 1992
Advance trade numbers are goods only. The full report is goods and services.
The US has consistently had a goods deficit for decades. The US typically runs a small trade surplus in services.
Recessions (yellow highlights) tend to improve balance of trade, temporarily.
Winning Big!
“We will soon be winning big on Trade, and everyone knows that, including China!”
Are We “Winning Big Yet?”
- Deficit Trump Years: From -66,402 to -84,938
- Deficit Biden Years: From -84,939 to -100,617 (and counting)
An Amazing Deal!
Dream Candidate?!
Competitive, Escalating Nonsense
Trump’s Tariff policy and Biden’s tariff policy are nearly the same.
The best description of both is “Competitive, Escalating Nonsense”
Tariffs cannot and will not fix as problem caused when Nixon took the US off the gold standard.
Neither Trump nor Biden understand this.
Is Globalization Dead? Two Views, Brad Setser’s and Mine
For more on this discussion, please see Is Globalization Dead? Two Views, Brad Setser’s and Mine
On the basis of rising Chinese exports, Setser says globalization is alive and well.
I, strongly disagree. Click on the above link for my rebuttal.
By the way, when I saw that report, I made a mental note that the GDPNow forecast would take a big hit. I will have more on GDPNow later today or this weekend.