There are two possibilities with regard to stubbornly weak US imports in 2017. The first is the more obvious, meaning that the domestic goods economy despite its upturn last year isn’t actually doing anything positive other than no longer being in contraction. The second would be tremendously helpful given the circumstances of American labor in the whole 21st century so far. In other words, perhaps US consumers really are buying at a healthy pace, just not with the same eagerness from China and the rest anymore.
It was during the dot-com recession of 2001 that Ross Perot’s ‘giant sucking sound’ finally materialized. Between then and the bottom of the Great ‘Recession’, one third of US manufacturing jobs disappeared. With imports stuck, especially those from China, could production be moving back onshore? The unemployment rate at 4.1% would seem to suggest a burgeoning economy where that might be the case for US consumers.
Unfortunately, that doesn’t appear to be happening according to any data. Despite it being a Trump campaign promise, there just isn’t any indication that the loss of manufacturing capacity is anything other than permanent. Then again, we don’t really know for sure because there just isn’t any growth in the demand of US consumers regardless of where the goods are produced.
This post was published at Wall Street Examiner on December 5, 2017.