It’s funny how as US trade goes higher, the unemployment rate goes lower

[sinkspur]

https://www.aei.org/publication/us-trade-higher-unemployment-rate-goes-lower/#.Vz-q_9-ZBts.twitter

It’s funny how as US trade goes higher, the unemployment rate goes lower

Jim Pethokoukis
May 20, 2016




My colleague Derek Scissors:

From 1992 to 2006, the annual trade deficit soared from $39 billion to $762 billion. While it did so, unemployment fell 3 points. The trade deficit was $39 billion in 1992, the year unemployment peaked at over 7%. In 2006, when we had the biggest trade deficit ever recorded, unemployment was well below 5%.

From 2007 to 2014, the annual trade deficit shrunk $200 billion. Unemployment soared then fell back. The smallest trade deficit in this period was recorded in 2009. The highest unemployment was also recorded in 2009.

Weird, huh? It’s almost as if the trade deficit does not cost US jobs. Scissors:

This is only one way to split the numbers and certainly not conclusive. The reason it may seem convincing is an expanding, vibrant American economy both creates jobs and boosts spending, including spending on foreign goods and services that raises the trade deficit. When jobs are lost and buying power declines, the trade deficit falls.

[sinkspur]

More proof that Trump is an economic ignoramus. 

Trade deficits have NOTHING to do with unemployment. In fact, trade deficits are not a bad thing, at all.  They reflect the ability of Americans to spend more money on products they want at low prices.

[Mechanicos]

The REAL Unemployment Rate for April 2016 is 22.9%.
http://www.shadowstats.com/alternate_data/unemployment-charts

[A-Lert]

More proof that Trump is an economic ignoramus. 

Trade deficits have NOTHING to do with unemployment. In fact, trade deficits are not a bad thing, at all.  They reflect the ability of Americans to spend more money on products they want at low prices.

Lack of jobs and qualified employees have much to do with unemployment. https://www.washingtonpost.com/news/wonk/wp/2015/11/06/ed-lazear-this-is-the-real-unemployment-rate/

Analogously, the peak pre-recession employment rate was 63.4 percent. Correcting for hiring and demographics makes September's rate of 59.2 equivalent to a pre-2009 rate of 61.4 percent, meaning we still have a 2 percentage point deficit when compared with the earlier peak. This amounts to about 4.8 million jobs. Put differently, the number employed has grown almost 13 million jobs since the employment trough in February 2010. But it would have to have grown by 17.5 million to make up for the recession and keep pace with growing population.

[sinkspur]

Lack of jobs and qualified employees have much to do with unemployment. https://www.washingtonpost.com/news/wonk/wp/2015/11/06/ed-lazear-this-is-the-real-unemployment-rate/

Analogously, the peak pre-recession employment rate was 63.4 percent. Correcting for hiring and demographics makes September's rate of 59.2 equivalent to a pre-2009 rate of 61.4 percent, meaning we still have a 2 percentage point deficit when compared with the earlier peak. This amounts to about 4.8 million jobs. Put differently, the number employed has grown almost 13 million jobs since the employment trough in February 2010. But it would have to have grown by 17.5 million to make up for the recession and keep pace with growing population.

Which has to do with the trade deficit how?

[A-Lert]

Which has to do with the trade deficit how?

Are you Obama's representative here?



http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm

In 2015, the total U.S. trade deficit was $531.5 billion. Employment didn't increase.


Why an Ongoing Trade Deficit Weakens the Economy

An ongoing trade deficit is detrimental to the nation’s economy over the long term because it is financed with debt. In other words, the U.S. can buy more than it makes because the countries that it buys from are lending it the money. It's like a party where you’ve run out of money, but the pizza place is willing to keep sending you pizzas and put it on your tab. Of course, this can only go on as long as there are no other customers for the pizza, and the pizza place can afford to loan you the money. One day the lending countries may decide to ask the U.S. to repay the debt. On that day, the party is over.