Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The Trade Deficit in Goods and Services Came in at $55.2 Billion in June
Posted Under: Data Watch • Trade

 

Implications: The Trump Administration may like the reduction in the trade deficit in June, but the details of today's report showed relative weakness in international trade.  Exports fell by 2.1% in June, while imports declined 1.7%.  As a result, the total volume of trade (imports plus exports), which signals how much businesses and consumers interact across the US border, which is what really matters, fell by 1.9% in June and is now down 0.3% from a year ago.  In the past year, exports are down 2.2% while imports have risen 1.2%.  There is a lot of angst out there from the pouting pundits that the China trade battle is nowhere near done.  We think the worst-case-scenarios much discussed by the financial press will prove excessively pessimistic, as they so often do.  We still don't believe an all-out trade war will materialize, but rather that these short-term skirmishes will lead to longer-term gains for all countries involved. No, President Trump's announcement of 10% tariffs on an additional $300 billion in Chinese imports (starting September 1st, 2019) yesterday is not a good thing in and of itself.  But China is hurting, and this ratchets up the pressure to get a deal done.  So far this year, US imports from China are down 12.4% from the same period in 2018, while up 33.4% from Vietnam, 20.2% from Taiwan, 10.7% from South Korea, 10.0% from India, and 6.3% from Mexico.  Companies are shifting production out of China.  And the longer this drags on, the worse the outcome will be for China. The list of companies leaving China continues to grow and, at some point, the damage will become too much.  It's in everyone's best interest to get a deal done.  In other recent news, automakers reported selling cars and light trucks at a 16.9 million annual rate in July, down 2.0% versus June and down 0.7% from a year ago.  However, the gradual slowdown in auto sales is a reflection of sales during recent years which exceeded those suggested by population growth and average fleet age, not a sign of overall economic weakness.  Consumers are shifting their purchasing power to other sectors.

Click here  for PDF version

Posted on Friday, August 2, 2019 @ 10:50 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.