An exercise in divination using the entrails of last week’s U.S. international trade report shows signs of a move with larger implications than just the gaping deficit that caught analysts wrong-footed: the possibility of a persistent burden on the American economy caused by Japanese and German imports, like in the 80s.
The U.S. trade deficit widened 16 percent in November to $48.7 billion, the Commerce Department said on Friday, above the $41.3 billion expected. The negative surprise prompted economists to cut hastily their U.S. gross domestic product estimates for the last quarter to a negligible rate. The stock market took a hit.
The disappointment was limited, however, as analysts attributed the bulky import bill behind the deficit increase to a resumption of merchandise flows into the U.S. after Hurricane Sandy paralyzed port activity in the East Coast the previous month. Some economists still on yuletide mode are, apparently, missing the big picture.
In the first 11 months of 2012 Japan’s trade surplus with the U.S. surged 24.7 percent over the same period of 2011 to $70.6 billion. Similarly, Germany’s gained 22.0 percent to $54.3 billion. China’s massive surplus stood at $290.6 billion, but its increase was much slower, at 6.7 percent. And OPEC’s net trade fell 18.9 percent to $95.5 billion.
GROWTH DIFFERENTIAL, OFFICIAL PROMISES AND … 1980′s FLASHBACK?
It is starting to look as if in the “New Normal” global scenario resulting from the Great Recession of 2008-09, the relative strength of the U.S. and its real exchange rate compared to Japan and Germany is causing a fast rise of those two nations’ surpluses in the world’s most powerful economy, while China’s and OPEC’s net commerce with the U.S. settles at a high level.