The “new normal” economy in the post-financial crisis apocalyptic age was supposed to be marked by large-scale deleveraging and a rebalancing of global current account and trade imbalances. However, while 2011 saw some deleveraging, U.S. households at the end of the year ramped up credit use, and now the U.S. Bureau of Economic Analysis has served up international trade figures that feel awfully familiar.
The BEA has reported that the December 2011 U.S. international trade deficit rose 3.7 percent from the prior month, to $48.8 billion. Exports increased 0.7 percent to $178.8 billion, and imports increased 1.3 percent, to $227.6 billion.
The 2011 international trade deficit increased 11.6 percent from 2010, to $558.0 billion from $500.0 billion. Exports rose 14.5 percent to $2,103.1 billion, and imports increased 13.8 percent to 2,661.1 billion.
Here is a link to the full report: International Trade – December 2011.
Does this mean the U.S. is about to recover at a faster rate, or are we building to yet another crash somewhere down the line? I think it is too soon, and there are too many variables, to form a reliable analysis. Financial crises, like major earthquakes, tend to have aftershocks long after the initial event. The aftershocks are rarely as devastating (hence they are “aftershocks” and not another earthquake), but those who lived through the earthquake understandably get nervous.
So, we should, and here we will, continue to monitor credit, interest rates, trade imbalances and the current account deficit for any clues that pressures similar to those that built up just prior to the financial crisis are returning.
Gregg D. Killoren
victoria1014
