{"id":1469,"date":"2019-03-06T11:43:31","date_gmt":"2019-03-06T16:43:31","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1469"},"modified":"2019-03-06T11:43:31","modified_gmt":"2019-03-06T16:43:31","slug":"december-trade-deficit-february-private-sector-jobs-and-help-wanted-online","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1469","title":{"rendered":"December Trade Deficit, February Private Sector Jobs and Help Wanted OnLine"},"content":{"rendered":"\n

KEY DATA:<\/strong> Deficit: $59.8 bil. ($9.5\nbil. wider); Imports: +2.1%; Exports: -1.9%\/ ADP: +183,000\/ HWOL: +0.3 points<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe soaring trade deficit is troublesome,\nespecially if job gains begin to fade.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  The markets are fixated on the trade\ndiscussions with China and for good reason: The trade deficit is soaring.<\/em><\/strong>  In December, it reached its widest level\nsince October 2008<\/em><\/strong>, when the financial system was collapsing.  Of course, conditions are a lot different\nnow, since we are growing decently while we were in a recession then.  But the hoped for narrowing has not\nhappened.  Since the fourth quarter of\n2016, the quarterly trade deficit has widened by nearly 18%.  In December, imports rebounded from a sharp\ndecline in November while exports continued to decline.<\/em><\/strong>  As for the situation with China, the numbers\nfor the year were ugly.  The deficit\nwidened by nearly 12%.  Yes, exports were\nup, by nearly 6%, but imports rose faster. \nKeep in mind, our imports from China in 2018 totaled\nnearly $540 billion but our exports were a paltry $120 billion.  But our trade deficit didn\u2019t just widen with\nChina.  It was larger against the EU,\nCanada, Mexico, Germany and OPEC nations. \nIn other words, we are funding a large part of the growth, whatever pace\nit may be, of an awful lot of nations.    <\/em><\/strong><\/p>\n\n\n\n

Friday is Employment Friday, so today is ADP\nWednesday.<\/em><\/strong>  Okay, those are my nicknames, but when the\njob report is due out, we get an indication of what the level might be when ADP\nreleases its reading on private sector payroll gains.  Not surprisingly, the increase in February payrolls\nis likely to come in well below the initial January government reading of\n304,000.<\/em><\/strong>  Two things stand out in\nthe ADP report: Construction and manufacturing continue to boom but small\nbusinesses are having a tough time getting and\/or holding workers.  Larger firms, which can pay the higher costs,\nare leading the way.<\/p>\n\n\n\n

Confirming that the labor market remains strong was\nthe rise in the Conference Board\u2019s Help Wanted OnLine index in February.  However, the details contain some warning signs.  Five of the nine regions posted declines in\nboth January and February.<\/em><\/strong>  This may\nindicate that the surge in payroll gains is coming to an end and more\nsustainable numbers, in the 150,000 to 175,000 range, could be what we see for\nmuch of the remainder of the year. MARKETS AND FED POLICY IMPLICATIONS:<\/strong>The\nwidening trade deficit, when combined with a softening of consumer spending\n(February vehicle sales were quite soft), points to a pretty ragged first\nquarter GDP growth number.<\/em><\/strong>  I\nhaven\u2019t seen any negative numbers yet, but estimates of around 1% growth are popping up\nall over the place.<\/em><\/strong>  I have\ndropped my estimate to 2%, but the vehicle numbers are compelling enough to\ntake that forecast down further.  As I\nhave noted, even if there is a trade agreement of some sort, it will not cause a\nsudden burst in U.S. exports to China. \nThat will take time and if the Chinese growth is as soft as most\neconomists believe (forget the official numbers), it is hard to see how they\ncan ramp up demand for U.S. products very much this year. <\/em><\/strong> At least we have the massive government\nspending bills to fall back on, but those effects will fade as we go through\nthe year.  So, expect growth this year to\nbe a lot less than many had thought, though in the range of what most economists\nexpected. \n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Deficit: $59.8 bil. ($9.5 bil. wider); Imports: +2.1%; Exports: -1.9%\/ ADP: +183,000\/ HWOL: +0.3 points IN A NUTSHELL:  \u201cThe soaring trade deficit is troublesome, especially if job gains begin to fade.\u201d WHAT IT MEANS:  The markets are fixated on the trade discussions with China and for good reason: The trade deficit is soaring.  … Continue reading December Trade Deficit, February Private Sector Jobs and Help Wanted OnLine<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1469","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1469"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1469\/revisions"}],"predecessor-version":[{"id":1470,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1469\/revisions\/1470"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}