Chart of the Day: Exports Soar to New High in July

More

As the pessimists continue to bemoan the recovery and count on a double dip, some more good news was revealed on Thursday morning. U.S. exports hit a new all-time high in July as the trade gap shrunk to its second smallest size this year. Considering that demand is the biggest problem preventing more rapid hiring, steadily rising exports is an important part of the recovery narrative.

Here's the chart, based on Bureau of Economic Analysis data:

exports 2011-07.png

The red line represents the July value, which you can use to compare prior months.

For starters, you can clearly see that exports have grown to reach a much higher level than they were at prior to the recession. In July they were up to $178 billion, a 7.3% increase over their pre-crisis peak hit in July 2008. This does not take inflation into account, but looking at CPI (which doesn't perfectly reflect export price changes), inflation was less than 3% over this entire three-year period.

In fact, July's new high even soared well above the previous high hit in April by 1%. That's a pretty big gain to see in just a couple of months. This cannot be blamed on oil either -- the month's gains were spread throughout various goods and services. Of the $6.2 billion month-over-month increase in exports, just $1.3 billion comes from petroleum sales.

Of course, this raises an obvious question: if exports are growing, then why aren't jobs? Well, they have been -- just not as quickly as exports. This implies that workers have been producing more to satisfy rising global demand. Since there's a limit to how productive a worker can be, hiring will have to increase eventually, if exports continue to rise.

Finally, this is good news for GDP. If exports continue to shrink the trade gap in August and September, then trade will help to boost growth in the third quarter.

Jump to comments
Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
Get Today's Top Stories in Your Inbox (preview)

What Crazy Tech Idea Could Become Real?

"There could be great intelligence enhancements, like infinite memory."


Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

A Time-Lapse of Alaska's Northern Lights

The beauty of aurora borealis, as seen from America's last frontier

Video

What Do You Wish You Learned in College?

Ivy League academics reveal their undergrad regrets

Video

Famous Movies, Reimagined

From Apocalypse Now to The Lord of the Rings, this clever video puts a new spin on Hollywood's greatest hits.

Video

What Is a City?

Cities are like nothing else on Earth.

Video

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Writers

Up
Down

More in Business

Just In