The US continues to run massive trade deficits. Despite the lack of interest in the mainstream, trade deficits matter. And as Peter Schiff said last fall, we can’t just ignore these trade deficits forever.
February did not set a new monthly trade deficit record, but it was very close, and it was worse than projected.
January saw another record trade deficit.
The $89.7 billion deficit shattered the $82 billion record set in December by 9.4%! Before March 2021, the Trade Deficit monthly record had been set in August 2006 at -$68B. This record stood for nearly 15 years! Records are now being broken almost every single month.
The trade deficit shattered records in 2021. Things didn’t slow down any as we rolled into 2022. The January trade deficit hit another all-time record high.
But nobody really seems to care.
We should.
Atlanta Fed President Raphael Bostic made an important admission during a CNBC interview. He confessed the Fed wasn’t really going all-in on the inflation fight. That raises a question: how is it going to tame the inflation monster? Peter Schiff talked about this admission during his podcast, along with a head-scratching article about the trade deficit in the Wall Street Journal.
In December 2021, the US ran up a total trade deficit of -$80.7 billion, just a tick shy of the record -$80.8 billion set in September. The Goods Deficit increased by 3.2% to come in at -$101.4B, eclipsing the -$100B mark for the first time ever.
This capped off a year in which the trade deficit shattered the record set back in 2006.
November 2021 charted a total trade deficit of -$80.2B just shy of the record -$81.4B in September. However, the data this month is far more concerning when digging into the details.
After a massive surge in the trade deficit occurred in September, October saw a big pullback to -$67.1B. The details showed that the volatility was driven by a data anomaly where Exported Goods from September were pulled into October. This created a series of Exported Goods values of $149.8B in August followed by $142.7B and $158.8B in September and October. Essentially, $8B moved from September to October, driving the trade deficit to all-time records.
The October trade deficit fell but the drop was primarily due to a data anomaly.
October 2021 charted a total trade deficit of -$67.1 billion. It was the lowest trade deficit since April 2021. Month-on-month, the trade deficit fell 17% from the record set in September.
The September trade deficit smashed the record set just last June.
September 2021 charted a total trade deficit of -$80.9 billion. That was up a massive 11.2% over the August trade deficit of -$72.8 billion and crushed the previous June record of -$73.2 billion by over 10.5%.
Trade deficits used to be an important market mover. In fact, many blame the 1987 stock market crash on a much worse than expected trade deficit. That led to weak dollar and bond markets that bled over into the stock market. But today, traders mostly ignore the trade deficit. In fact, the US trade deficit set another record in September and the markets didn’t blink. Peter Schiff talked about it in his podcast.
A surge of imported services drove the trade deficit to a new record in August. Peter Schiff appeared on NTD News to talk about the trade imbalance. He said it is not a sign of a strong economy and not the kind of records we want to be breaking.
