{"id":369,"date":"2010-03-11T10:45:00","date_gmt":"2010-03-11T15:45:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=369"},"modified":"2018-08-21T09:00:34","modified_gmt":"2018-08-21T13:00:34","slug":"net-export-number-improves-but","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/03\/11\/net-export-number-improves-but\/","title":{"rendered":"Net export number improves, but&#8230;"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">In case you are new to the blog, let me repeat a formula that I use frequently.\u00a0 Gross Domestic Product, alias the economy, is measured as: <strong>C<\/strong>onsumer spending + <strong>I<\/strong>nvestments by businesses + <strong>G<\/strong>overnment spending + <strong>eX<\/strong>ports, net.\u00a0 In other words, GDP = C + I + G + X.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Today the January net exports number was reported by the U.S. Commerce Department.\u00a0 Specifically, the trade deficit declined $2.61 billion, or 6.6%, to $37.29 billion.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Analysis:<\/strong>\u00a0Frankly, major business publications don&#8217;t often feature the <strong>X<\/strong> portion of GDP.\u00a0 So what gives today?\u00a0 Well, in part, the major business publications seem to be trying to &#8220;talk up&#8221; the economy, in my opinion.\u00a0 While the reduction in the pain that is &#8220;net exports&#8221; is encouraging, the trade deficit remains a source of economic loss for the United States.\u00a0 In other words, a trade deficit literally means that the total subtracts from the U.S. economy.\u00a0 Unfortunately, the U.S. has been a net debtor nation in trade for decades.\u00a0 This is not news.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Additionally, 56.7%, or $1.48 billion\u00a0of the trade deficit improvement came from a reduction in the purchase of foreign cars by our fellow U.S. citizens.\u00a0 Quick, think of a foreign car manufacturer that might be suffering from a decline in sales?\u00a0 Hmmm, Toyota comes to mind.\u00a0 The question is: have U.S. consumers permanently reduced their purchase of Toyotas?\u00a0 If not, then the improvement in the trade deficit is merely a short-term fluke.\u00a0 My own opinion is that Toyota will see reduced demand for its cars for several years, but that there will be a gradual improvement.\u00a0 That translates into a short-term effect on GDP, not a permanent one.\u00a0 Consequently, the lessening of the economic drag that is net exports is not likely to repeat itself.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Importance grade:<\/strong> 3; despite the fact that the improvement in the trade deficit is getting a lot of press today, this data really is not that important.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In case you are new to the blog, let me repeat a formula that I use frequently.\u00a0 Gross Domestic Product, alias the economy, is measured as: Consumer spending + Investments by businesses + Government spending + eXports, net.\u00a0 In other words, GDP = C + I + G + X. Today the January net exports [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-369","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=369"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/369\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}