Powered by Stimulus & Rent/Mortgage Payments “Not Made,” US Trade Deficit Hits Record Worst Terrible Level Ever

Not a sign of strength, but of big economic distortions.

By Wolf Richter for WOLF STREET.

Consumers are spending their stimulus money and their extra $600 a week in unemployment benefits, and now the extra $300 a week in unemployment benefits, and their fraudulently obtained unemployment benefits. And they’re also spending the money they’re not paying to landlords because they’ve stopped making rent payments due to the eviction ban. And they’re spending the money they’re not paying to mortgage lenders because their mortgages are now in forbearance and they don’t have to make mortgage payments. And they’re spending on other stuff the money they’re not spending on airline tickets and restaurants and hotels. In other words, consumers are spending, but not always where they used to, and retail sales have hit a record in July and August, and much of this retailed merchandise was imported.

Imports of goods in August fell 4.3% year-over-year, to $201 billion (seasonally adjusted) as imports of consumer goods jumped, while imports of capital goods and industrial supplies – which is what companies buy – fell, according to the Commerce Department this morning.

But exports of goods, which would really help the US economy – they plunged 13.3% year-over-year, to $118 billion, with nearly all major categories plunging by the double digits. And the trade deficit (exports minus imports) worsened by 13% to an all-time record worst terrible horrible $82.9 billion:

Imports of consumer goods, the largest category, rose by 2.4% in August compared to August last year, to $58 billion – that’s the power of stimulus money. Imports of food, feeds, and beverages rose 6.8%, to $13 billion.

But imports of industrial supplies fell 11.3% compared to August last year, to $37.9 billion; imports of capital goods fell 4.1% to $55 billion. Imports of other goods fell 2.2% to $10 billion. And imports of the wide category that includes cars, trucks of all kinds, buses, parts, auto bodies, chassis, tires, engines, etc. fell 12% year-over-year to $28 billion.

Exports in August fell 13.3% year-over-year. The only single-digit decliner was exports of food, feeds, and beverages -3.3% ($11 billion). Exports of all other major categories fell by the double-digits: industrial goods -11% ($39 billion); capital goods -18% ($36 billion); automotive vehicles, parts, etc. -14% ($12 billion); consumer goods -11% ($15 billion); other goods -18% ($5 billion).

This is the disconnect, after three decades of trade policies that favored only Corporate America and its relentless focus on globalization, lower costs, and stock prices, instead of the US economy and labor. Imports in red, exports in black:

A merchandise trade deficit is a negative for the economy. And it’s a negative for the GDP calculations. It lowers GDP. The stimulus money – the portion that went overseas – stimulated the economies overseas, and these countries, steeped in their economic troubles, countered by cutting back in purchases from the US.

Many countries want to “export themselves out of trouble,” and that’s working for countries that can pull it off.

But the US – with its skewed incentives and the totally globalized retail giants such as Walmart and Amazon and globalized Corporate America that doesn’t care about anything other than its stock price and low costs – wants to “import itself out of trouble.”

And that, by definition, never works in boosting the economy, though you can boost stock prices with it. Rising imports and a record worst terrible trade deficit are not signs of strength, but of big economic distortions.

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  89 comments for “Powered by Stimulus & Rent/Mortgage Payments “Not Made,” US Trade Deficit Hits Record Worst Terrible Level Ever

  1. jmayer says:

    “I got pig iron. I got pig iron. I got all pig iron.”

    Covid seems to be a perfect insertion into world drama for a stock piling transition of resources for nation states.
    The dollar is being exported, a weapon of mass destruction.

    • BrianC - PDX says:

      Well, if you want to ride you gotta ride it like you find it get your ticket at the station
      Of the rock island line
      I may be right, I may be wrong
      You know, you’re gonna miss me when I’m gone

      Always liked the Johnny Cash version…

      RIP The Man in Black

      • I am that I am says:

        …. and pig iron is a euphemism for slot machines, are we saying sound investing is dead? it’s all a casino? I don’t understand anymore just less and less

  2. Lee says:

    Just slap on a 10% import tax on everything imported and bought over any international platform like Australia did.

    Buy anything on ebay from an overseas vendor and ebay adds a 10% GST on the item and supposedly pays it to the Australian government. The tax is on the total value including any postage costs.

    We call it the “Harvey Norman” tax after the businessman who said he couldn’t compete with overseas business as it was cheaper.

    Sure – as his company reports record sales and profits…………………..

    • Andre says:

      The 10% “import tax” is only to compensate for the GST Harvey Norman and all retailers have to charge its customers.
      Donald Trump has already placed huge import duties on Chinese imports with which US manufacturers are still not able to compete on price.
      Protectionist policies lead to trade wars and historically do not appear to ever have the desired effect. The Australian Hawke-Keating government took the brave and positive decision to free up the economy dropping import duties to good effect.

      • There have Always been trade wars.Whatever happened to making do,being resourceful,and upcycling not to mention borrowing or buying locally,preferably from a charity thriftstore or small shop. Keeps locals employed,saves the municipal taxbase,saves on pollution,and does not grow China”s military?

      • CRV says:

        How can you compete on price of things you don’t produce?
        Or does one think that raising the price of foreign goods will incentivice home production? Why bother to invest in the production of goods when you can play the financial markets?
        Another question: how do you export your currency without buying foreign goods? If you don’t want to buy foreign goods, then don’t.
        But the US has been living the good life by exporting dollars in exchange for goods. Leaving the export of dollars out of the equasion skewes the trade deficit. Include this export of dollars and the picture will be totally different. Dollars can be seen as a good as well. It is created, with very little effort, and it gives a great return in terms of energy.
        Very little energy has gone into creating a dollar, while much more energy is used to create the goods the dollar buys. Again, the US has had a great deal for years. And now it is complaining about it? Baffles my mind!

        • Jdog says:

          NO policy benefits everyone. Especially globalization. Some have benefited at the expense of others. Wealth disparity is at all time highs. Employment participation and home ownership are at all time lows. It has also weakened the US substantially and our ability to defend ourselves.
          The greed of a few, has impoverished many, and endangered us all.

      • rankinfile says:

        Tax credits to companies that ship factories and jobs and factories overseas impoverishes so-called free market capitalist countries peoples,and eventually causes riots and revolution.

        Protectionism is one thing,rewarding labor and environmental arbitrage is quite another.Don’t trust the guy manning the gate of your gated community,he’s got family coming,and they’re hungry.

      • Tony22 says:

        Here’s an equivalent that would work wonders.

        “All U.S. government tax dollars shall be spent ONLY on goods and services manufactured or provided within The United States.”

        “If no such production facilities available, there shall be a four year transition period during which companies can shift 25% of production to the U.S. each year.

        Government loans availble to capitalize said stateside production shall be repaid, with interest, by providing discounted merchandise or services until loans repaid. Afterwards, competitive bids.”

        Cue the shrieking of the globalists explaining why this can’t work in 3,2,1…

    • happ_man says:


      why tax anything anymore? get with the new program, the govt juts prints whatever it desires to buy votes or spend on whatever it wants.

      Taxes are so old school

      • p coyle says:

        if taxes ever go away, i posit they will be replaced by some other mandatory fee/charge, following an expensive branding campaign. most people will be thrilled by no longer having to pay taxes and getting to contribute to the “new” awesome thing.

    • MCH says:

      The problem with import tax is that there are just some things that the US doesn’t manufacture any more.

      As our great leaders of past has said, the US is stronger because of its service oriented economy, and all of those low wage manufacturing work doesn’t belong… or something to that effect.

      And beside, the US is addicted to stuff. How else do you explain the spend that is pushing up Amazon, Apple, etc.

      • Bead says:

        The deep thinking economists looked at their models and discovered that American jobs would be more exalted than mere manufacturing. This was because all our brains are equally capable of symbolic processing according to some well known unwritten theorem. Nobody should doubt models.

        • MCH says:

          Especially supermodels who are super hot. That really drove their Deep thought processes. ?

    • roger says:

      That what Trumps wants ,,,,big tariffs for imports. That will come with some problems as well

  3. 2banana says:

    737MAX fiasco and travel bans?

    Commercial plane production used to be one of the few export bright spot in industrial goods.

    “Exports in August fell 13.3% year-over-year. The only single-digit decliner was exports of food, feeds, and beverages -3.3% ($11 billion). Exports of all other major categories fell by the double-digits: industrial goods -11% ($39 billion)”

  4. Seneca's cliff says:

    I have a feeling that a year or so after the pandemic is over there will be a big surge in demand for those junk hauling services . People will look around their abodes ,stuffed with all the junk they bought on Amazon during the pandemic and say” what was I doing”. The stimulus checks will be long gone but the pocket fishermen, and sea monkey aquariums will still be there.

    • BrianC - PDX says:

      Storage Units… I have noted this before, but here goes.

      20,000 years from now, grad students will be digging those things up and every once in a while they’ll find a body in one. “This was a King! This was all of the stuff they buried with him!” They will exclaim. Many journal articles and academic careers will be made interpreting the contents.

      • 91B20 1stCav (AUS) says:

        BrianC-have always had a sneaking suspicion that the ankh was actually the ancient Egyptian equivalent of the golden arches (…hey, if only extraterrestial aliens (…as opposed to Moses’ or other enslaved ‘alien’ populations…) could have built the pyramids, my goodness, then there must be an ‘alternative facts’ Rosetta Stone in the Nile mud, somewhere, no?…the tortuous contortions that some minds seem to go through to achieve a magical, binary, simple answer never fails to amaze me).

        may we all find a better day.

    • Thomas Roberts says:

      Seneca’s cliff,

      The big question is what exact items, people spent all the money on. Home office stuff, computers, and video games are clear winners. But, what exactly else is the big question. Besides their new home office stuff (mainly chairs and desks), which, they will have to keep if WFH becomes permanent, otherwise, they might toss a lot of this stuff away. Right now, people might be sitting on top of whatever previously was in their new or “refurbished” home office. I would guess that most of the money was spent on small expensive items like electronics and overspending on everyday items they normally buy “I.e. more expensive shampoos, disposable stuff, and groceries”. I also think some things, especially groceries, briefly raised their prices, during the extra 600 a week era. A 6 pack of coke for instance (16oz bottles) was $2.50 pre lockdown, $3.33 during extra 600 a week era, and is currently $2.75.

      In my region (part of a state) half of the office supply stores recently started their closing down sales. Since lockdown, I think everyone bought out their computers, a good amount of office chairs and some desks, but little else. They are all chains and with everything going digital, computers; chairs; printers (for now); and desks, are the only necessary items. I think alot of people just bought a office chair and laptop and are using kitchen table as desk (easier to watch kids this way too). The office stores didn’t have enough supply of computers and certain other items to really benefit and were slower than other stores to restock most in demand items.

      I’m sure people are buying alot of “smart stuff”, but, little that lasts and nothing as cool as an aquarium. Other than electronics, i’m guessing people will have very little to show by next year for all the stimulus money they got. In store, since the lockdowns started, other then the electronics and groceries section (which looked ransacked), I’ve seen little else that seems like it got purchased more or even the same. Almost all the clothing stores are definitely way down.

      • California Bob says:

        Gun stores have had a hell of a run. Ammo–esp. defense loads–is in short supply.

        • Wolf Richter says:

          Coffee filters have been out at Costco for months, at Safeway for weeks, and at our Trader Joe’s as of a few days ago (people making coffee at home or using them as face masks, or whatever).

          All kinds of weird stuff about consumer behavior is cropping up.

      • If you all read Wolf”s other articles and peruse other data heavy sites which track these things,you will know that many people paid down their credit cards and bought cars. I think the average age of the cars owned by Americans was in the 10-13 years range. I am sure Many people repaired their cars and were Thankful to have a more reliable vehicle since busriding=covd germs and sometimes assaults. I know that the Wealthier Americans either invested or saved their covd checks/unemployment which seems a good idea given the chaos.

        • Tony22 says:

          What has that done to the value of condos, apartments and houses without parking that supposedly rely on proximity to transit?

          Scott Wiener keeps reintroducing his Transit Oriented Development bills, in Sacramento. In addition, the real estate agents mafia is getting involved:

          A friend sent me this:

          “A local Association of Realtors (AOR) notifies C.A.R. of an elected official or candidate who opposes growth in his/her community. Then CREPAC (California Real Estate Political Action Committee) will move forward with an opposition research report and an opposition campaign against the named elected official/candidate. The notice states; “By requesting this program, the respective Local AOR acknowledges that the campaign will be mostly negative.”

          “In conjunction with “Operation Local Growth”, C.A.R. supported a pro-housing-supply package of bills during the 2020 legislative session. The bills included: AB-2345 (re: Increasing Density Bonuses); SB-995 (re: Streamlining review in accordance with the California Environmental Quality Act (CEQA)); SB-902 (re: Up-zoning single family zones without CEQA review); SB-1085 (re: Density Bonus Law & decreasing affordability requirements); SB-1120 (re: Ending single-family zoning); and SB-1385 (re: Ministerial approval of housing as an allowable use in office, retail, and commercial zones and requiring such housing to meet minimum densities).”


        • p coyle says:

          @tony: was your friend in monty python? all those acronyms remind me of “life of brian.”

      • Petunia says:

        The women who work at my local nail salon tell me between job losses and working from home, the customers are not coming in as much. The customers are not going out for work or anywhere else. Business there is down.

        • Stephen C. says:

          In my area a lot of the wealthy didn’t feel safe going to their massage therapists, acupuncturist, herbalist, yoga class, nail and hair salon, and whatnot. I guess they felt uneasy with all that cash stuffing their pockets so they went online and bought “things.” And we all know that most little ticket items (ex military hardware) is made abroad.

          In other words, the trickle down went trickle sideways.

          I’m glad that some of that spending has come back. Much of it is not a tax write-off so a lot of it is paid with cash. Keeps us non essential little people from starving to death.

      • sierra7 says:

        Thomas Roberts:
        Not all who are spending are buying office/computers/video games…..etc.
        One of my adult children (married with multiple children) laid sod alongside their vegetable garden; built a barbecue station with a warming fire pit. He, his wife, their 6 children and in-laws did all the work themselves.
        Most of the rest of my family (large) just paid off excess debt.
        Different folks with different strokes.

        • Thomas Roberts says:

          I never claim everyone is acting a certain way. But on masse, I see some things selling well and most poorly, despite all the stimulus money.

          Groceries and home food related items, whether they be coffee filters, gardens, and your families barbecue station are all things that go together, roughly. Restaurants are down, however, in my area. Electronics sections and probably guns ransacked.

          Most things are way down though. Other than electronics and some home improvement projects (potentially including home offices) the way the stimulus was spent left little remaining for most. Hopefully,a bunch did pay off those credit cards and stash some in the bank.

          As an example for price increases during the extra 600 a week era, I should mention for groceries, especially at the start of lockdown during the hoarding period, regional grocery chains cancelled all their sales, effectively raising their prices, that lasted until about the end of the extra 600 a week.

    • Zantetsu says:

      If obscenities are not allowed on site and you know that, why misspell a word to try to sneak them in? How about showing some respect to the moderator, the site, and its readers instead, and choose some more elevated language?

    • Bead says:

      I’m holding out for top dollar for my COVID pile no matter how long it takes

    • striptococcus says:

      Gentlemen: strip joints, casinos, and other venues are now closed. Be gracious and support the working ladies in each and every way you can. Put your stimulus to good use, the economy demands it!

      • IE says:

        Going to the strip club near Christmas is basically the same thing as toys for tots.

  5. Cas127 says:


    This is a fairly bizarro world outcome but perhaps your stimulus/forbearance-driven expenditure shift is the explanation.

    But those factors are transitory (stimulus is already tapering and forbearance will end…someday) so don’t you think we will ultimately see a 2010-like compression of trade deficits in the not distant future? A la 2010?

    (The global nature of Covid may be playing a role here too…in non-fiscally-insane nations, pandemics lead to reduced consumer confidence/expenditures and therefore fewer imports from US).

  6. William Smith says:

    Everything’s all fine. Pish posh on manufacturing or exporting useful things. The US is brilliant at “financial stuff.” It can provide wonderfully diverse and *creative* “financial services” to the world. I think Iceland did something like that very successfully…… oh wait….

    • Joe Saba says:

      actually Iceland did a very fine job of throwing BANKSTERS IN JAIL
      good comment

  7. fred flintstone says:

    The US is a country that keeps shooting itself in the foot…….with a smile telling everyone who will listen……it don’t hurt…….we’ve got lots of shoes.

    • 91B20 1stCav (AUS) says:

      But Fred, how many toes???

      may we all find a better day.

    • Thomas Roberts says:

      Pretty much every country is shooting themselves in the foot right now. America has the most strategic advantages, so it just has to not screw up too badly and ideally less than or equal to everyone else. As long as America can hold it themselves somewhat together, it will at the current rate outlast China and The EU, thus remaining the only “superpower” economy. A transformed EU or EU successor or America imploding itself are the only major realistic threats.

      • Xabier says:

        How true, Thomas Roberts.

        Just as wars are not won by the best generals, but by those who make fewer mistakes than their opponents.

        The US had immense advantages in resources, manpower and ingenuity: all have been squandered, but perhaps enough still remains in comparison to competitors.

        • Jdog says:

          It also had a political structure that allowed and rewarded people for entrepreneurship. Then socialism crept in and squeezed the small business people out of business. Corporatism is now the new royalty, and the rest of us are the new serfs and peasants.

      • sierra7 says:

        Thomas Roberts:
        “America imploding itself are the only major realistic threats.”
        “Tick-Tock, Tick Tock…………..Tick Tock”!!

      • Stephen C. says:

        Wasn’t it Nikita Sergeyevich Khrushchev who said, “We will outlast you”?

  8. DR DOOM says:

    As long as the rest of the world takes our debt for stuff, relax. Fire up that Amazon aroma therapy candle and go e-shopping on Amazon. Our job in America is to consume and we take our job seriously. Someone else picks up the tab.

    • rhodium says:

      *picks up the trash

      Well, if we make sure people who want jobs can get them, then only people who work should be able to buy trash right? I don’t advocate for spoon digger jobs, but surely some people could use some construction experience building houses, trains, and expanded utility systems for housing and industry. At least you’re getting something other than higher prices as with ubi. Teach the people to build.

  9. To make matters worse, much of that stimulus money was used for down payments.

  10. BuySome says:

    Tax hikes can’t be your saviour…consumers will spend what they can to get what they want and if their pockets are emptied they’ll cut domestic spending. All you’ve done is pump up the government’s ability to waste even more cash. I suggest requiring that all imports must be bright red and permanently labeled “!!Foreign!!” in giant yellow letters. (Domestically produced articles can not use these colors.) See how that fits the home decor when visitors arrive. Social shaming can be a pretty strong motivator. Stoning is better. Let he who has not bought overseas cast the first…yada, yada.

  11. 91B20 1stCav (AUS) says:

    Batting 1.000, Wolf. Thanks, as always, for manning the spotlight.

    may we all find a better day.

  12. gorbachev says:

    You sound a little sad these days Wolf.Ok .Time for a road trip.

    Oh fuck.

  13. David Hall says:

    U.S. corporations selling merchandise abroad brought some income back to the USA.

  14. Brant Lee says:

    Import taxes won’t make a dent because of the mark-up these retailers are charging in their monopoly businesses.
    Question? What do you think is a reasonable mark-up for retailers on their merchandise? Seriously, do you feel comfortable paying anyone 200 to 400+% over costs on imported goods? If the US would implement an 80% mark-up ceiling (very reasonable) on imported goods retail prices would fall drastically, (more) retailers would earn a reasonable return and more factories in the US would open up.

    • Petunia says:

      Because of globalization not everything imported is unnecessary stuff. Eye glasses and lenses are imports, drugs are imports, and ethnic foods are imports. And so are those cars most of us drive.

      • Brant Lee says:

        Unnecessary is paying for anything at an exorbitant mark-up from monopoly corporations. Goods available to Americans are to the point of price extortion because so few control the supply lines. Pay their price or do without. Walmart and Amazon wipe out US small business daily in every area of business.

        • Totally agree with petunia and brant lee. It comes down to values.Do Americans Value frugality,clean air/water/land,stable taxbases not overreliant on high property taxes?Do we Value safe,quality products bought locally if possible? Is a livingwage and safe work conditions even Thought of or is Everything about price and convenience?Is child labor/slave labor okay?

          Some imported items are necessary and necessarily imported,but more Americans need to be more mindful of who makes their new items and how these workers are treated and paid.

        • Winston says:

          “but more Americans need to be more mindful of who makes their new items and how these workers are treated and paid”

          I don’t give a d**n about anything other than SLAVE labor since, for much of the world, anything more than a dollar an hour is a great improvement to their condition which they voluntarily accept.

          What I DO care about is US consumers continuing to support China (CCP) with unnecessary purchases which right now are exceeding the capacity of our rail system coming from the west coast. If they own big ticket items made in China like smart phones, HDTVs, laptops, etc. that still work, they should not be replaced. If this also hurts in the US, so be it, because the only thing multinationals are loyal to is dollars and since our BOUGHT government has allowed them to prove the great truth of the old commie adage, “A capitalist will sell you the rope you hang him with,” it’s up to consumers.

          The Soviet Union was doomed to eventually fail due to their economic system. China is a communist oligarchy greatly enabled by capitalism and the profit-driven, bought politician self-delusion in the West that a communist country which has never known democracy will become a friendly democracy as it grows more prosperous.

        • Petunia says:

          WB, Winston,

          The worst slave labor is the one that occurs in our own country, namely prison labor and restaurant workers whose minimum wage is $2.13. I do care deeply about the exploitation of these workers. These practices are supported by both parties who take money from the prison and restaurant lobbies.

          As far as other countries, it is there job to protect their people.

      • Anthony A. says:

        We still make about 17 million cars and trucks here. You don’t have to buy an imported vehicle, although many foreign cars are made here in U.S. staffed plants and in Mexico.

        • sierra7 says:

          Agree with your post about how we treat our own labor but wanted to add:
          When globalization practices were “activated” in the 1990’s labor was not invited to the global table.
          (Same thing happened during the Obama admin. gathering of health care corporatists to discuss health care; the “commons” was not invited)
          It should be very, very clear to most of the laboring classes (all over the globe) that we live in a “corporate” world; the commons has no place in it unless it labors and spends itself to death!

        • Petunia says:


          I lived in NE PA for some years. The destruction of labor there in coal, steel and railroads went back to the 1970’s when the unions refused to “modernize” to compete. I got to see Bethlehem Steel when it was just a pile of rubble.

          I also saw the unions refuse to modernize to allow the telephone industry to go wireless. Then we got a deregulated not unionized workforce.

          The unions needed to cooperate with modernization and restructure for a changing economy, but they never do. It is easier for corporations to buy the union leadership and the local politicians, which they did.

      • MCH says:

        You wanna know something?

        Years from now, when people look back at this period, one of the biggest villains they will point out is Tim Cook, who helped to build a house of cards atop of which sits Apple.

        If you look at the Bill of material on the iPhone, what you realize pretty quickly is that most of that value has gone overseas, to the Contract manufacturers and suppliers of parts to Apple. And at the forefront of that drive was leader Tim, with his affable southern drawl and charm.

        And the funniest thing of all is years ago when Steve Jobs took his iconic photograph giving a middle finger to Big Blue… little did he realize that ultimately an IBM alum would run Apple far longer than any other CEO of the company who isn’t Jobs.

      • Jeff T says:

        Exactly. My asthma medicine has a retail price in the US of $295, with shopping discounts $189 at Walmart. As I have no insurance I have no idea what it might cost if I did. From India pharmacy it costs $6 each if bought in lots of three, plus $20 shipping. Breathing is more important to me that water, food and self actualization. I am thankful that cheaper imports are available.

  15. historicus says:

    Trump’s Platinum program…money strewn out to the Black Community for their vote.

    I approve of most of Trump’s policies..
    BUT BUT there has never been a President that has worked the Fed the way he has NOR has there been a President that has pumped money out to the population looking for their vote.

    DeToqueville was correct..
    “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”

    • Jdog says:

      As a republic, our country could have prospered forever, but we allowed our country to morph into a socialist democracy.
      Now the tyranny of democracy, and the feudalism of Corpritocracy threaten our very survival.

  16. HD says:

    The article is informative. I wish that there were some actual rule-enforcement on the brazenly juvenile and rule-breaking comments that are appearing increasingly often in this space.

  17. Voltamom says:

    Meanwhile, the ads on Wolf’s page are for everything from single family houses to deodorant.

    • happy_man says:

      @ voltamom

      Ads? What are those? Who can live with ads, not me! I haven’t seen an ad in years on any website thank goodness

  18. happy_man says:

    the first paragraph of this article is sublime

    I will read it again

  19. MonkeyBusiness says:

    “Trade wars are easy to win” …… for the other side.

    America just can’t win anymore.

    Semiconductors are our last hope. Once the Chinese catch up to us on that or God forbid, pass us by, we are toast.

    • Ethan in NoVA says:

      Bad news… I think the US lost the chip manufacturing thing. TSMC is the one now manufacturing all the groundbreaking chips. Intel is struggling with the new smaller stuff as far as I know. So we are toast.

      • MonkeyBusiness says:

        US companies must be some of the dumbest companies around. Like who thought it would be a great idea to build semiconductor expertise on an island across from China?

        But then again putting eggs in one basket has always been an American expertise.

  20. MonkeyBusiness says:

    I think next year we might see a pretty strong US Dollar devaluation. 30% devaluation might just make our exports competitive.

    Might not be a bad idea. Wean our country from consumer culture. It will be painful just like an addict getting off drugs, but hell we have to start somewhere.

    • bungee says:

      a drop in the usdx of that size is big trouble imo cos it means the price of imports go up in dollar terms. consumers arent the only ones buying imported goods. the government does too. lots. and they’ll print to get them if needed. which sends imports even higher. which means more printing. which sends imports higher &c..

      …and things will move very fast if we ever print for real, imported goods instead of just buying home-grown financial products.

      the US trade deficit is an amazing thing to behold. every year for like, 40+ years. if we’re going to close the gap by devaluing the currency, then we really have to trash it. savers better buy gold while they still can.

  21. Double D says:

    Worst, terrible & horrible are accurate descriptors of where this country is now and it’s getting progressively worse at an alarming rate. We need an overhaul of how this Country is governed and by whom.

    How the country is being sped down a path of destruction wasn’t discussed in tonight’s Presidential debate. Why? Because discussing that plan would expose them & make them appear more incompetent than they already are…if that’s even possible in Trump’s case. They’ll talk about climate change, racial injustice, whose economic projection is the most accurate (a ridiculous sparring over a “V” vs. a “K” recovery), whose created the most jobs, whose more responsible for people dying from healthcare issues & Covid ad nauseam, as if that has more importance than the “real” problem with this country. Our way of life is circling the toilet bowl. No jobs, no growth, no prosperity for the 99% resulting in no hope and no future.

    But hey, it’s gotten a lot warmer in California and there’s a new executive order to ban sales of new fossil fuel vehicles by 2035. We’ve got to worry about taking care of those poor power companies – those that have seen their usage rates dwindle. There’s more important stuff to discuss.

    • Well-put and spoton! It is almost as if alot of this was designed to bring America to its knees and submit to the U.N./WHO. America needs to be in charge of its own currency,not just the coins. There was a J.F.Kennedy memo or order wherein he wanted to take over the currency and bring that power to Congress/Treasury. Wonder if That is why he and brother died?????

      • Jdog says:

        The path of destruction began in 1913.
        The elimination of self determination, and implementation of a feudal system, run by bankers and the elite was always the goal. It is simply coming to it completion.

  22. unclekim says:

    America’s best (and only?) export is the paper dollar (aka the JPow confetti). The world is addicted to it, so the printing presses won’t stop.

  23. Americans pay higher rents.
    China is exporting its affordable housing.

    State-Sanctioned Squatters
    trash their abodes, for real.

    It’s the most amazing thing, ever,
    in my 60 years here, on the planet.

    Imagine a world where home prices
    are falling, and wages are rising,
    and everyone owns their home.

  24. Rinaldo says:

    I suggest to add an inverse graph of the US budget deficit to your chart.

  25. YuShan says:

    The import graph is even more weird if you highlight the recession periods. Normally, imports would fall because people have less money to spend. But this time imports explode!

    We are really in some weird parallel universe now. This is the worst recession since the Great Depression. Record high stock market! Red hot housing bubble! Record retail sales! Out of control government finances but zero interest rates!

    It scares the sh!t out of me.

  26. Mora Aurora says:

    Thank You Wolf for Wolf Street.

    A personal little story behind business, finance and money as related to the US trade deficit.

    Just before the last US election I was in Europe on vacation and sitting at a dinner table with a group of American friends, mostly business men and ladies, people of faith, military officers and their charming spouses, each extolling belief in ‘the’ business man as most suited to be elected to run the country. One fellow remarked that he was wearing his red Trump designer necktie for the occasion. I casually asked him to check the label on his necktie for where it was made. ‘China,’ he said and the discussion quickly went silent but just as quickly the conversation moved on to more pleasant distractions.

  27. DanS86 says:

    Watched the outsourcing of manufacturing jobs from the front working a for a supplier to some of the largest manufacturing companies in the Midwest (or were the largest LOL!). Briggs and Stratton anyone???

    P.S. there is something going wrong with this website and page changing.

  28. J says:

    Question about the import-export graph: on first glance, it appears they describe very similar processes. Why would this be? I’d have thought that imports would be quite different from exports. Aren’t imports driven by consumers, while exports are driven by producers? Can someone explain why these two graphs appear to be so very similar?

    • Wolf Richter says:

      The three down-jags were/are global recessions, including the Financial Crisis in the middle. This slashed demand in nearly all products globally. Plus, during a recession, inventories get slashed by cutting orders more than needed. So you get these huge moves in both imports and exports. Looks similar in other countries. Big exporters such as Japan had huge drops in exports during the Financial Crisis.

  29. nodecentrepublicansleft says:

    I propose a 3-prong strategy to solve this problem:

    1) Golf all weekend long
    2) Spend half the day watching Fox “news”
    3) Spend the other half of the day rage tweeting

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