U.S. trade deficit drops to more than three-year low

Discussion in 'Wall St. News' started by ironchef, Jan 8, 2020.

  1. ironchef

    ironchef

  2. Yes.
     
  3. SteveM

    SteveM

    Depends. You'll notice on the chart below, that the US trade deficits have historically shrunk during periods of weaker US economic activity (2001, 2008, 2009).

    Recent US manufacturing PMI data would suggest that we are currently in a period of decreasing economic activity similar to the 2000-01 recession.

    I could be totally wrong about why the trade deficit is narrowing - perhaps more American consumers and companies are "buying American". But if that was the case I don't think we would be seeing the weak US manufacturing PMI data that we have seen for the last 6 months.


    TradeDeficit.JPG

    Edit: below is US manufacturing data for reference:

    eerilysimilar.JPG
     
  4. Honestly trade deficit isn't that important but what is important is the terms in the calculation of the deficit with respect to GDP.
     
  5. ironchef

    ironchef

    If your chart on ISM Mfg gives any indication, it says 2020 could be a stock market boom. The best performing years over the past decade were 2013-14, 2016-17 when ISM were negative at the beginning of those years.
     
  6. Peter8519

    Peter8519

    It could be like a python swallowing a big prey. Businesses getting goods in before the tariff kicks in.
     
  7. Nine_Ender

    Nine_Ender