The U.S. Census Bureau reported Tuesday that the April goods and services trade deficit was an enormous, humongous $40.9 billion, down from an enormouser, humongouser $51.4 billion in March. (March was revised to $50.6 billion in today's report.)
- The monthly U.S. goods deficit with China dropped from $38.9 billion in March to $27.5 billion in April. However the deficit is up $12.4 billion year-to-date compared to 2014.
- Our goods deficit with Japan was $6.7 billion in April and is up over $1.5 billion year-to-date compared to 2014.
- The U.S. goods deficit with South Korea was $2.1 billon in April, up nearly $3 billion this year.
Trade Deficit Is Enormous, Humongous Drain On Our Economy
While April's enormous, humongous $40.9 billion trade deficit is lower than March's even more enormous, humongous $50.6 billion, this is still an enormous, humongous drain on the U.S. economy.
Imagine $40.9 billion of orders coming in right now to companies that make and do things inside the U.S. And then another $40 billion or so of new orders next month. And on like that every month. Think about the factories opening, the hiring, the ripple effect as people receiving paychecks buy clothes, cars, and other goods. Wages would be forced up. The economy would boom. That is what we are losing because of this enormous, humongous trade deficit.
Scott Paul, president of the Alliance for American Manufacturing, issued this statement:
“The monthly decline in the trade deficit masks an uncomfortable truth: Global industrial overcapacity, an overly strong dollar, and unfair trade practices are contributing to a surge in our 2015 trade deficit. All the year-to-date numbers are headed in the wrong direction, and they help to explain the sudden drop in manufacturing hiring so far this year.
"Underinvestment in domestic infrastructure and research, combined with a flood of manufacturing imports, are stifling manufacturing’s comeback. Our workers and businesses are doing all that they can to be globally competitive, but Washington stands in the way. Passing a robust and long-term infrastructure plan, boosting trade enforcement efforts, and penalizing currency manipulation are essential ingredients in a true manufacturing resurgence. ”