Thursday, October 13, 2011

Export growth continues strong

August trade figures released today show that exports continue to grow at strong double-digit rates. More and more of our output is being exported; exports now account for about 14% of U.S. GDP, up from less than 10% at the end of 2001, and less than 4% in the early 1970s. This can only be a healthy development.


McKibbinUSA said...

Yes, export growth remains strong, however the "U.S. trade deficit with China hit a new record in August (10-13-2011, WSJ) -- apparently, stronger US export growth results in a wider US trade deficit -- what say yee...?

Gene Prescott said...

Visually, on the second graph the deficit appears to be flat from a much larger period a few years ago.

Benjamin Cole said...

President Bush jr. ushered in the trade-enhancing exchange rate for the US dollar. The dollar became "cheaper" on Bush's watch. and i think it was a good thing.

If the global economy grows, I expect USA exports to keep growing double digits.

If you take away the great export figures, the domestic economy is just about flatlining.

Food for thought.

mmanagedaccounts said...

Scott, I keep hearing in interview after interview the biggest problem is the presence of a chronic lack of domestic demand, and since the consumer accounts for roughly 70% of growth, the government must step in as the buyer of last resort to spark demand.

One reason given why the American consumer is not spending is deleveraging, paying down debt. Much debt has been eliminated by foreclosures, and I remember your posting a chart showing credit card debt roughly where it was prior to the recession.

Can you provide any data that shows how debt laden American consumers are?

If slow economic growth is a result of a lack of demand, why wouldn't a tax cut work to put more money in consumers' pockets, thus stimulating demand. Why must the government creat the demand by spending.

I also keep hearing we have an infrastructure that is breaking down. I'm no aware of any infrastructure problems in my area of central Florida. Exactly where are these third world infrastructure conditions?

Ed R said...

Why are US exports up? Because the value of the US$ is down.

Benjamin Cole said...

mmanaged accounts:

Head south on the 5 freeway from Los Angeles, There is bottleneck galore where it connects to the 60. The freeways are often slow around Los Angeles.

Left untreated, you start to get Third World-style massive and everlasting jams. I think the same thing is happening around Atlanta and Houston.