Trade Deficit, Buy American, & More

Week in Review: Feb. 6-10

After last week’s deluge of economic data, this week’s trickle of indicators was a nice reprieve. Still, we got updated data on the trade deficit, a not-so-great Buy American policy from POTUS, and new consumer sentiment readings.

Monday

Gas Prices

Gas prices fell slightly, down to $3.552 per gallon, ending a streak of five straight weekly increases.

TSA Checkpoint Travel Numbers

Travel numbers for the week ending 2/7/2023 were about 7% below 2020 levels but remain above 2019 levels; seems like we’ve settled into a bit of a groove there.

Senior Loan Officer Survey

According to this survey from the Fed, lending standards tightened slightly over the past three months and demand for loans fell across most consumer and business segments.

Tuesday

International Trade Deficit

The goods and services deficit increased to $67.4 billion in December, as exports fell and imports increased. This suggests that domestic demand is holding up better than international demand.

Last week, I wrote about how demand for services was increasing and demand for goods falling. That seems to be the case internationally, too. U.S. exports of good fell in December, while exports of services increased.

State of the Union

POTUS gave the State of the Union address on Tuesday. There wasn’t much about economic policy in there (there never is), but one quote bears mentioning:

“Tonight, I’m also announcing new standards to require all construction materials used in federal infrastructure projects to be made in America. American-made lumber, glass, drywall, fiber optic cables. And on my watch, American roads, American bridges, and American highways will be made with American products.”

America already has absurdly high infrastructure costs. Requiring materials to be American made just means we’ll get even less bang (or bridge, or road, or whatever) for our infrastructure-package buck. Not great.

Wednesday