Did you know? Today, the U.S. Department of Commerce released its monthly trade data for June. The casual citizen — your average, everyday Joe — understandably might not have noticed, as this release was greeted by much of the media with its usual muted reaction. And most folks might not have been watching the regularly scheduled programming on business news television.
Don’t get me wrong. I’m not here to shake a pitchfork at the “lamestream media” for its lack of interest in another goods trade deficit. The United States has run such a deficit every year since 1976, and the world hasn’t ended (not for some, at least). And the fact of the matter is: Monthly trade figures don’t get pundits’ motors running like the monthly jobs report does.
Nerd --> RT @nick_bunker: You can tell the true econ nerds by who livetweets the GDP report vs jobs day— igorvolsky (@igorvolsky) April 26, 2013
That said, it’s still a shame. “Running a trade deficit means that income generated in the United States is being spent elsewhere,” wrote Jared Bernstein and Dean Baker in a 2013 New York Times opinion. “In that situation, labor demand — jobs to produce imported goods — shifts from here to there.”
If we continue to run large, persistent trade deficits, we have no good choices. We can offset that exported demand with either bubbles or budget deficits. Or we can go austere and slog along with unacceptably high levels of unemployment and weak growth.
But if we shift our focus from reducing the budget deficit to the trade deficit, we could make a big difference, not just in the national accounts, but in the lives of people for whom that unfavorable math has meant hardship for far too long.
In an era when American trade deficits are the norm, a 2013 opinion remains airtight today. Today, the trade data coverage was mildly pleasant, reflecting the deficit’s improvement from $44.7 billion in May to $41.5 billion in June (for what it’s worth, the monthly trade deficit hasn’t dropped below $35 billion once since 2012).
However, our trade deficit with China, with whom the U.S. has an increasingly difficult diplomatic relationship, remains as robust as ever. In fact, the June numbers show that the U.S. clocked its third highest-ever monthly goods deficit with China ($30.1 billion). That should be something to pay attention to, for those who follow manufacturing news.