In November, the US blew a great big green one in our direction. The latest external trade data for the US shows that their balance of goods and services narrowed massively in November, shaving roughly $20 billion off their external deficit. Since they were running deficits of around $60 billion a month for the last four years, that is one huge monthly correction.Did UK exporters feel it? Absolutely. In November, UK exports to the US were down 21 percent compared to the same month last year.
The US is no longer the engine of the world economy. The rest of us better get used to it.
6 comments:
Wow, that is an amazing chart.
Even with the pound's drop against the dollar, this has happened.
The US consumer has snapped his check book shut for now, for many reasons. It would be interesting to see the export chart on China--not holding my breath!
One underlying reason may simply be a change of attitude here: Many people are asking, 'How much STUFF do I need to live happily?' The answer is coming back, 'Probably less than I have sitting around my house right now!'
We monitor Craig's List for amusement and shopping, and we are seeing amazing deals on really good merch that people don't want in their houses(or need to sell to raise cash). Very good cars are going begging, antique furniture, all sorts of good stuff.
We bought some good stuff last month, all for cash, all from individuals. Lots of other nice stuff we look at, and realize we don't need it, and don't have room for it anyway.
Good news for everyone else is this:
IF(and only if) the US gets its house in order, slashes the balance of payments deficits, lets the housing bubble deflate to reality, and gets back into the business of producing and selling stuff, then we will be back, raring to go, ready to buy some more stuff. Likely not as much, and not as gaudy as before, but we will buy again.
Well, we'd like a dining room table, but it's hard to see how many jobs could be created making a 100-year-old table.
Trade deficit stuff is always amusing. The US, which didn't actually supply any goods in return for their imports, just IOUs, no longer wants stuff.
So, that means that the Chinese and to a lesser extent the UK no longer ship over real things for paper.
The US trade deficit improvement was mainly due to the oil.
Think about how much impact of the US trade deficit on China, Japan, Korea.
mL
Dearieme - I think you've found a gap in the market.
Perhaps we could start producing antique furniture for the next century. It would also keep storage depots in business.
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