Enormous, Humongous Trade Deficit Falls, Thanks To Oil And Exports

The monthly U.S. goods deficit with China was $26.9 billion in November, down from $28.9 billion in October. However the 2013 trade deficit with China of $293.9 billion is running ahead of 2012′s balance of $290.6 billion. Note that U.S. exports to China hit a record, which might reflect a rebalancing of China’s economy toward consumption, which would be incredibly good news for us if this is right.

The U.S. goods deficit with Japan was $5.8 billion in November, down from $6.4 billion in October.

The deficit with the European Union dropped 29.4 percent in November to $10.1 billion.

Trade Deficit = Lost Jobs

When trade is balanced, that’s fine, because it means other countries are buying the same amount of stuff – goods and services – as we are. But if we buy more from other countries instead of from here, that is money for jobs in those countries instead of here. That is why a trade deficit is bad. It represents lost jobs and prosperity.

Some economists say a simple rule of thumb is that for every $1 billion in trade deficits the economy loses 9,000 jobs. The 2012 trade deficit was $540.4 billion. Do the math. (Hint: 540 x 9,000 = more than 4.8 million jobs.) Never mind the effect on the wages and “job fear” for everyone else.

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