The oil effect continued to recede in late spring for more than just WTI prices or inflation rates. US trade on both sides, inbound and outbound, while still positive has stalled since the winter. Exports grew by just 6.2% year-over-year (NSA) in June 2017, about the same pace as estimated in December 2016. After contracting for nearly two years, twenty-two months straight at one point, global demand for US goods has not appreciably rebounded from it.
On the inbound side, reflecting domestic demand for foreign goods, US imports were up only 5.1% year-over-year (NSA) in June. It is here where oil price base effects were largest but now almost completely exhausted. Subtracting foreign oil purchases, imports were up 4.4%.
The lack of economic momentum is most distinct in the seasonally-adjusted estimates on either side. Exports rose somewhat in June over May to the highest since December 2014, but the estimates for this latest month are only 1.3% more than those for January 2017. Exports, seasonally-adjusted, also remain more than 6% less than the peak in August 2014, nearly three years ago.
Adjusted imports after surging in January have been mostly lower, too. The June figure is 1.3% below January and still 3% less than April 2014. The trend over the last eight months has followed closely the annual changes in crude oil rather than suggesting a rebound in US domestic appetite for overseas products more generally (even though the exchange value of the dollar remains largely “risen”).
These are, of course, very unwelcome results for our global trading partners who have been in very large part counting on the US unemployment rate to be applicable for once. If the downturn of 2014-16 could be explained by “transitory” factors (that somehow took more than two years to clear up, as economists would have it) and the US economy finally past them and in fine shape otherwise (according to the unemployment rate), then it might seem plausible that US demand would not just increase but do so emphatically.
