The US trade deficit jumped more than expected in February, according to the latest data from the Bureau of Economic Analysis.
- The goods and services deficit increased to $70.5 billion in February, up 2.7% from January and the highest level since October 2022.
Downer. Both exports and imports were down in February, but the bigger decline in exports pushed the deficit up for the month.
- Exports of goods exports fell to $251.2 billion, 2.7% less than January
- Imports February imports were $321.7 billion, 1.5% less than January.
Speaking of trade, Martin Wolf had a great piece in The Financial Times on the misconceptions about trade and what how bad policy could be made because of it.
- Bad Info. “it is untrue that liberal trade is a dominant or even significant cause of the woes of the working classes of western societies. The principal driver of the decline of industrial employment has been rising productivity.”
- The Result. “the current US approach will prove counterproductive, self-sufficiency is a foolish goal, competitive subsidisation is a negative-sum game, and politicisation of trade is sure to lead to wasteful outcomes…the US must understand that it is setting an example others will follow. Interventionists abroad will feel legitimised, making the world economy less open.“