The non-oil trade deficit declined slightly last month:
We've recovered from the worst of the pandemic, but we're still running bigger trade deficits than we did during the teens. This was a big concern back in the day, but for some reason nobody seems to care about it anymore.
Maybe the folks who used to yell about it realized what a deficit actually means: that we consume more than we produce.
We produce US Dollars -- we're the world's only source. For some reason people in other countries wish to trade TVs, cars, and other stuff for our dollars, and we want the stuff more than the dollars, so we trade. This is just business. There's no moral dimension to it.
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The constant adjusting for inflation on everything seems dogmatic. Here, you could instead track the ratio of the deficit to total GDP.
Oh, that's a good one. That would have inflation built in, in a way.
Or you could just link to the FRED chart. Which may explain why the trade deficit was a bigger concern 20 years ago. It was twice as big.
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iPhones.
big TV's
clothes. (Look for the Union label when buying a shirt dress or blouse...)
shoes
cars (actual cars, SUV's and "cross overs" are considered small trucks)
PC's and electronics in general
Starting the chart in 2011 just as we were coming out of a major recession is a little misleading. Another way of looking at it is that an insatiable appetite for foreign consumer goods and technology is also a sign of a strong economy. It's also a sign of strong foreign investment in our debt and in our economy. I think most economists and have come to see the trade deficit in far less alarmist terms than they did a few decades ago. Insisting on zeroing out the trade deficit, or running a surplus amounts to a kind of neo-mercentalism.
There is a significant difference between:
"The trade deficit improved slightly in November"
and
'The non-oil trade deficit declined slightly last month:"
Why is a trade deficit bad?
We get a TV from China and we give them a promise to pay for it sometime in the future.
Sure, we need to pay for it but we get to use the TV today.
TBH, I would rather have the TV today than the other way around.
I build a TV and give it to you. I see your TV in your living room but I don't get to watch it.
Which do you want?
The faux-panic was not so much about the trade deficit per se, but about the deficit with China, which Americans decided had deceived them by not becoming a Western democracy in return for letting them make all America's consumer goods.
Now that the Chinese trade deficit in goods has been cut by something like 40% since 2018, the panic can be allowed to subside for a while.