We've had to wait to look at the trends in international trade between the U.S. and China, the world's two largest trading nations, because the release of the Census Bureau's trade data for August 2013, originally scheduled for 3 October 2013, was delayed until 24 October 2013 as a result of the partial government shutdown.
It turns out that we really didn't need it to gain any great insight into the trends that have developed in 2013, as August 2013 was pretty much like the five-to-seven months before it.
After adjusting for the exchange rate between the U.S. dollar and Chinese yuan, we see that for the value of goods that China has imported from the U.S., that has meant year-over-year growth rate readings consistent with very sluggish economic growth in that nation. What really stands out in the data for China is that for the last seven months, the year-over-year growth rate of the value of goods that it imports from the U.S. is really more characterized by its strange monthly oscillations into and out of recessionary (negative) territory. Since the growth rate of imports provides a lagging indication of the relative economic health of a nation, we would say that China has essentially been experiencing near-recessionary conditions since the beginning of the year.
Meanwhile, the growth rate in the value of goods that the U.S. imports from China each month suggests that the U.S. economy began growing a bit more strongly in the last five months, picking up a good bit of steam going into August 2013.
That's consistent with what we've observed with our best near-real-time indicator of U.S. economic health, which would put a peak in U.S. economic activity in August 2013. Since then however, that indicator suggests that sluggish growth has returned to the U.S. economy, for which we would expect to see as a confirmation in the trade data over the next few months.
All in all, what we observe indicates that the economies of both the U.S. and China are pretty much well muddling along.
- Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 29 October 2013.
- U.S. Census Bureau. Trade in Goods with China. Accessed 29 October 2013.