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U.S. Trade Stalls, Too

Jeffrey Snider profile picture
Jeffrey Snider

US imports rose year-over-year for the seventh straight month, but like factory orders and other economic statistics, there is a growing sense that the rebound will not go further. The total import of goods was up 9.3% in May 2017 as compared to May 2016, but growth rates have, over the past five months, remained constrained to around that same level. It continues to be about half the rate we should expect given the preceding contraction.

Though price effects are tailing off, there was again a large base effect distortion from crude oil. US imports were up significantly again in May, by 41.8%, meaning that imports ex petroleum rose by just 4.8%. For the five months of 2017 so far, non-crude imports have grown by just 5% over the same period in 2016. That's far too much like 2013 and 2014.

Even US trade with China is less impressive than it might otherwise sound. Imports from our largest trading partner (inbound) rose by more than 11% year over year in the latest data. That was the third straight double-digit growth rate. Even those gains, however, are about half to a third of what Chinese industry is counting on for a true global recovery.

The same is also true of inbound European goods. US imports from Europe grew by just 2.7% this May and just 2.2% over the prior six months (including May).

There isn't much difference on the export side, either. Outbound trade has rebounded from last year as everything else has, but not to the degree which would re-establish badly needed symmetry. Exports were up 7% during May, but as with imports, there isn't any indication of further momentum and acceleration. Instead, the level of activity appears to be in 2017 stuck best characterized as not 2016.

This lack

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Jeffrey Snider profile picture
As Head of Global Investment Research for Alhambra Investment Partners, Jeff spearheads the investment research efforts while providing close contact to Alhambra’s client base. Jeff joined Atlantic Capital Management, Inc., in Buffalo, NY, as an intern while completing studies at Canisius College. After graduating in 1996 with a Bachelor’s degree in Finance, Jeff took over the operations of that firm while adding to the portfolio management and stock research process. In 2000, Jeff moved to West Palm Beach to join Tom Nolan with Atlantic Capital Management of Florida, Inc. During the early part of the 2000′s he began to develop the research capability that ACM is known for. As part of the portfolio management team, Jeff was an integral part in growing ACM and building the comprehensive research/management services, and then turning that investment research into outstanding investment performance. As part of that research effort, Jeff authored and published numerous in-depth investment reports that ran contrary to established opinion. In the nearly year and a half run-up to the panic in 2008, Jeff analyzed and reported on the deteriorating state of the economy and markets. In early 2009, while conventional wisdom focused on near-perpetual gloom, his next series of reports provided insight into the formative ending process of the economic contraction and a comprehensive review of factors that were leading to the market’s resurrection. In 2012, after the merger between ACM and Alhambra Investment Partners, Jeff came on board Alhambra as Head of Global Investment Research. Currently, Jeff is published nationally at RealClearMarkets, ZeroHedge, Minyanville and Yahoo!Finance. Jeff holds a FINRA Series 65 Investment Advisor License.

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