Posted on 10/14/2005 6:48:56 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
The overall U.S. goods and services trade deficit increased from $58.0 billion to $59.0 billion, a 1.73% increase, and the third highest total on record. The aggregate figure masked some positive news. The rise in the overall deficit was led by big increases in imported oil, while the non-oil sectors of the economy, including hi-tech, manufacturing, and services, improved their international positions.
Yet the August trade figures also show that these improvements remain far below the levels that would enable America to pay for oil and other imports from its national earnings rather than with its national credit card.
Total goods and services exports rose from $106.4 billion to $108.2 billion, an increase of 1.69%. Total goods and services imports increased $2.9 billion from $161.4 billion to $164.3 billion, a rise of 1.77%. Both total imports and exports hit new records. The August year-on-year deficit in goods and services is 8.92% higher than 2004's level.
The August goods deficit was up from $62.5 billion to $63.8 billion, an increase of 2.08%. August goods exports were up from $75.1 billion to $76.7 billion, an increase of 2.13%. August goods imports were up from $137.6 billion to $140.5 billion, an increase of 2.11%. The August service surplus rose from $4.6 billion to $4.8 billion, an increase of 4.35%. August services exports edged up from $31.3 billion to $31.5 billion, an increase of 0.64%, while imports remained at roughly $26.7 billion.
The non-oil goods deficit fell from $42.84 billion to $41.72 billon, a drop of 2.61%. The August oil deficit surged from $18.65 billion to $20.61 billion, or 10.15%. Non-oil goods exports rose from $73.73 billon to $75.87 billion, an increase of 2.90%. Non-oil imports rose from $116.57 billion to $117.59 billion, an increase of only 0.88%. August oil imports were the highest on record. The August monthly non-oil deficit is the lowest monthly total since October, 2004. The non-oil monthly exports total was a new high while the monthly non-oil imports were the second highest on record.
The August manufacturing trade deficit of $52.195 billion represented an increase of 1.21% over July's $51.571 billion. Manufactures exports rose from $52.799 billion to $59.094 billion, a jump of 11.92%. The much larger August manufacturing imports total rose from $104.37 billion to $111.289 billion, a rise of 6.63%.
So far in 2005, cumulative manufacturing export totals of $449.22 billion are running 8.83% ahead of the comparable 2004 figure. Yet 2005 cumulative manufacturing imports of $837.28 billion are running 9.28% ahead of the comparable 2004 figure.
The China goods deficit rose from $17.7 billion to $18.5 billion, an increase of 4.52%. U.S. goods exports to China rose from $3.6 billion to $3.9 billion, or 8.33%, but the much greater U.S. imports from China increased from $21.3 billion to $22.4 billion, or 5.16%.
Much more dramatic changes took place in U.S. trade with its oil-rich NAFTA partners, Canada and Mexico. The U.S. goods deficit with Canada rose from $6.0 billon to $6.7 billion, an increase of 11.67%. U.S. exports to Canada shot up $14.6 billion to $18.3 billion, or 25.34%. At the same time, U.S. imports from Canada also rose vigorously, from $20.6 billion to $24.9 billion, or 20.87%. The U.S. goods deficit with Mexico soared 20.0%, from $3.5 billion to $4.2 billion. U.S. exports to Mexico rose from $9.2 to $10.6 billion or 15.22%, but U.S. imports from Mexico increased faster, jumping from $12.7 billion to $14.8 billion, an increase of 16.54%.
The U.S. goods trade deficit with the European Union inched up by 0.71%, from $11.21 billion to $11.29 billion. U.S. exports to the EU rose from $14.31 billon to $14.44 billon, or 0.91%. U.S. imports from the EU increased nearly as fast, from $25.51 billon to $25.73 billon, or 0.86%. The U.S. trade deficit with Japan narrowed slightly, from $6.63 billion to $6.59 billion, or 0.60%. U.S. exports increased from $4.73 billion to $4.96 billion, or 4.86%, while U.S. imports crept up from $11.36 billion to $11.55 billion, or 1.67%.
U.S. hi-tech trade presented a mixed picture. The recent U.S. trade deficit in Advanced Technology Products shrank dramatically from $4.19 billion to $3.29 billion, or nearly 21.5%. U.S. exports of these goods rose from $17.30 billion to $18.54 billion, or 7.17%, while U.S. imports increased only $21.49 billion to $21.83 billion, or 1.58%.
In the Other Private Services category, however, which includes the economy's highest-paying professional and information technology service jobs, the U.S. trade surplus rose only from $3.674 billion to $3.829 billion, or 4.22%. U.S. exports of these services increased from $12.363 billion to $12.563 billion, or 1.62%. U.S. imports, however, rose also, from $8.689 billion to $8.734 billion, or 0.52%. The August Other Private Services exports total was only the nation's sixth-highest on record, while imports rose to a new record. These figures once again show that the U.S. economy's gains in hi-tech services are nowhere near adequate to offset its chronic and continuing losses in manufacturing and advanced technology products.
ping
Isn't there supposed to be a lot of oil in southern Utah or something? Why the hell can't we use THAT instead of these terrorist regimes?
Hmmm....an article about my stock portfolio?
Tonelenson says something positive. Has hell frozen over?
It's all a function of price. Oil in Saudia Arabia costs about 2 bucks to lift out of the ground (although I think that has gone up a bit). Oil shale in the US and Canada costs more than 20. So, theoretically, we could operate entirely on North American oil. The problem is that not only would our costs rise, but our lack of demand for oil from Saudia Arabia would cause Saudi prices to drop, meaning every other country in the world would get their oil for even less, putting every US industry as a massive competitive disadvantage. That is, assuming that we could enforce a ban on it.
Oil is a commodity (for the most part) and it will ultimatley flow around the world to its best usage. For example, if we stopped importing from Saudi Arabia, some enterprising person in Europe would buy it up and sell it to a firm in Norway who would then pass it on to us as Norwegian oil. It would be like banning Nebraska wheat but not Kansas wheat. Since there is no way in distinguishing the two at an intermediate point of sale, Nebraska wheat would make its way into Kansas and then onto the wheat market.
Well there are a few of us out here who recognize that there hasn't been much good to report on the trade front for the last 14 years or so.
Running trade deficts of close to 3/4 of a trillion dollars per year is shere loonacy to some of us.
The transfers of technology (for free) to a nation like China is simply unconcionable as well. Imagine if we had run this type of operation with Russia during the Cold War. Would the USSR have colapsed? I doubt it. Would that have been good?
We are busy creating the next global adversary, and that's suicidal. If it were a person we'd have locked them up for 30 days observation by now, followed up by continued confinement in a padded cell.
I don't disagree with you there, although I would point out another perspective: If you take the presumption that free trade is ultimately unavoidable, then it might benefit US workers to transfer technology to Asia. What happens in a perfect free trade world is that worldwide goods ultimately all trend to one worldwide price. The same happens to labor. That is why US wages in industries exposed to free trade are falling. Ignoring the security issues, it is in the interest therefore of US workers for thirld world economies to grow rapidly so that wages there rise and there is less of a gap between US and third world wages.
Of course, I personally would prefer if the entire rest of the world, China, Middle East, India, etc. Stayed stuck in the middle ages forever. Anyway, I just wanted to make that hypothetical comment above without neccessarily endorsing it.
Thanks for the response. IMO, it would have been far superior for us to encourage corporations to start operations overseas in what would effectively be closed markets.
In our nation we create things for our use, and in Asian nations they do the same. In this way, those nations economies would jump started, but it would be far less impactful on our workforce.
If things did equal out as far as wages go, at that point I might relax the inter-nation trade.
Died in the wool free-traders would hate this idea.
I don't think it is wise for us to set up a situation where our workers to have to compete with people who make $0.20 an hour. The fastest growing sector in our economy is service sector jobs, low wages.
That's not supportive of families or futures IMO.
And just HOW are lower wages supposed to be a "benefit" to US workers?
Especially considering that, as US taxpayers, they have to support the world's largest debtor nation?
I didn't say that they were.
No problem. Thanks.
Well then, I must be confused.
I don't understand this statement:
If you take the presumption that free trade is ultimately unavoidable, then it might benefit US workers to transfer technology to Asia.
But then you explained how trade is lowering US wages without explaining how transfering technology to Asia "might" benefit US workers.
Sorry, I'm just not following what you're saying...
Sure, assuming that there is going to be free trade, which is going to harm US workers, they would be harmed less if wages overseas rose as a result of technology transfers. That is all I was trying to say.
OK, I understand.
I simply failed to consider that to be a possibility.
Afterall, China has such a huge population that there will ALWAYS be a labor glut to drive wages DOWN.
There is little chance of wages rising unless there is a drastic reduction in population, due to situations such as mass starvation.
At least, that is the assertion made by "comparative advantage" guru David Ricardo when he proved that the "natural price" of labor stabilizes at the subsistance level.
BTW, I am NOT entirely opposed to transfer of peaceful technology to Asia/China.
They certainly could use such technology to efficiently improve the living conditions of their own citizens.
I simply believe that such trade should be "balanced", and that most of the output of their production should be used for that benefit. Not this lopsided "trade" that undermines our own businesses, industries and citizenry.
There are 140 million employed Americans. Last time I looked our wages were above subsistence level.
I am not sure that I agree with that in theory. In theory, China's large population would lead to China having more factories, as there is a need for more goods, etc. That is, assuming consumers across the world have the same preferences, there should be the same ratio of jobs to provide goods.
The problem comes in when, like China, Indonesia, etc. There is not capitalism, property rights, rule of law, etc. And all of those workers are simply competing to work in factories that supply OUR goods. In that case, it would certainly be fair to describe the Chinese labor pool as limitless.
Yeah, but you're also intentionally ignoring Rodney's statement that they "are falling".
But since you can't follow the discussion, here's something else for you to play with:
Bankruptcy filings soar in Minnesota
Nationally, personal bankruptcies have increased 19.4 percent this year as of Oct. 8, according to Lundquist Consulting, a firm that tracks personal bankruptcy data.
I agree. The benefits of private enterprise are more widespread when larger companies are home-grown from smaller, Mom & Pop businesses. Simply displacing Chicom Government monopolies with behemoth multinationals is exchanging one oppressive barrier to market entry with another. The little Moms & Pops get squashed like bugs.
In general, I favor policies that promote business development. And there ARE tremendous advantages to economies of scale. But IMHO, there comes a time when mega-corporations become TOO LARGE. They become detrimental, rather than beneficial to our nation. Take a look at the annual revenues of some of the largest "Global 500" companies. Cripes, they have more economic clout than the GDPs of some major industrialized nations! IMHO, the antitrust laws need to be revised to reduce the influence of these unelected corporate bureaucrats.
"I hope we shall... crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."
--Thomas Jefferson to George Logan, 1816. FE 10:69
If Rodney had more than a statement to prove wages actually are falling, I'd be interested in discussing it.
Nationally, personal bankruptcies have increased 19.4 percent this year as of Oct. 8,
Yes, that's proof wages are falling....unless it's proof that people are filing before the new law takes effect.
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