A practically unnoticed phenomenon underpins the negative U.S.
economic data trends we saw in Q4 2015 and the enormous increase in
market volatility in the first week of 2016: The United States’ global
competitors are—once again—using vast pools of low-wage, underutilized
labor, a huge excess of domestic production capacity, and/or the
ever-stronger U.S. dollar, to grab whatever share of demand they can in
order to maintain/recover growth in a sluggish global economy.
While the plummeting price of energy—the result of insufficient global demand and huge new oversupply from North America itself—has cut America’s energy deficit to a level less than 20% of its 2008 peak, the overall current account deficit of the U.S. grew rapidly in 2014 and, more alarmingly, in 2015. The nation’s current account is the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.
But here’s the brutal bottom-line: The non-energy portion of the U.S. current account deficit, relative to GDP, has ballooned by 236% since its low in December 2013, during which period the energy deficit fell by 57%.
http://www.businessinsider.com/us-economy-weak-except-for-employment-2016-1
While the plummeting price of energy—the result of insufficient global demand and huge new oversupply from North America itself—has cut America’s energy deficit to a level less than 20% of its 2008 peak, the overall current account deficit of the U.S. grew rapidly in 2014 and, more alarmingly, in 2015. The nation’s current account is the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.
But here’s the brutal bottom-line: The non-energy portion of the U.S. current account deficit, relative to GDP, has ballooned by 236% since its low in December 2013, during which period the energy deficit fell by 57%.
http://www.businessinsider.com/us-economy-weak-except-for-employment-2016-1
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