Upside To Dollar Collapse: Narrower Trade Deficit

Calculated Risk takes a closer look at the trade deficit by examining freight traffic through Los Angeles and Long Beach ports. Predictably, the collapsing dollar has resulted in a decrease in inbound traffic and a surge of outbound traffic.

Imports have been surging for years (not exactly new news), but have slowed recently. For the last two month, imports averaged a decrease of 8.8% year-over-year.

Recently exports have picked up (because of the weak dollar), and for the last two months imports have increased an average of 24.3% year-over-year.

Although this is just two Los Angeles area ports, this fits with the declining trade deficit (see 2nd graph). For export businesses in the U.S. these are good times – and a big part of the reason the U.S. has seen less manufacturing employment weakness than in earlier recessions.

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