American trade

Much was made of the ‘sharp drop’ in American trade deficit for June. Predictably, it has led to some bumping up of real GDP numbers for Q2 and for Q3 from the usual suspects. But, the ex-Petroleum trade deficit at the current run rate of USD270bn in the first half of 2014 is on course to meeting the worst trade deficit numbers (USD550bn in 2006) before the crisis. So much for improvement in competitiveness of American manufacturing. These are in chained 2009 dollars. See file attached. Chart in the second worksheet. Figure for 2014 is just double the number for the first six months. Hence, it is an estimate.

The improvement in the Petroleum balance is, of course, due to fracking. But, the costs of it are not yet counted or disclosed or both.

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