A flurry of recent and seemingly bad economic news masks an important development under the surface—signs that private-sector momentum in the United States is fundamentally sound due in large part to the continued growth in U.S. exports.
The most recent piece of economic data came out in late August from the Bureau of Economic Analysis, which revised down its estimate of economic growth for the second quarter. The economy expanded more slowly than previously thought in large measure because of a sharper jump in U.S. imports than the BEA had previously expected. Yet largely overlooked in the BEA report is that U.S. exports expanded by an annualized, inflation-adjusted 9.1 percent in the second quarter.
U.S. exports have been an important contributing factor to the fledgling economic recovery, and August’s data show the continued relevance and strength of U.S. exports, especially from the manufacturing sector. U.S. exports have grown at substantial rates for four quarters in a row now. And, U.S. exports to the European Union rose by a strong 9.1 percent from June 2009 to June 2010, despite the financial crisis in Europe this spring.
It is clear from these numbers that U.S. policy needs to bolster U.S. exports. The recovery is under way in large part because domestic and international policy measures have helped to boost U.S. exports. Now, the attention has to be on protecting these gains. Smart policy steps to boost export performance and to rein in imports should be taken sooner rather than later.
For more on this topic please see:
– Export Strengths Underlie Lagging Economy by Sabina Dewan and Christian E. Weller