The Census Bureau released its estimates for November US trade. It was yet another debacle for the FOMC narrative about an economy poised to overheat. November was the month in between the two FOMC meetings where they first declared (October) risks diminished and then (December) recovery conditions fully met. Instead, both exports and imports in that interim shrunk considerably, casting very real doubt as to what the FOMC is actually using as a basis for economic assumptions. We know already, as the Committee has rather plainly implied, that they cast aside actual market data but increasingly it looks to be their full approach with estimates of all types.
US exports fell by more than 10% for the second straight month, and for the third time in the past four. That much was expected, at least in the direction if not the intensity, by orthodox economists who consider overseas turmoil the primary economic thorn. However, imports likewise declined for the eighth straight month, leaving only one positive number for all of 2015 with which to suggest robust US demand.
This post was published at David Stockmans Contra Corner on January 8, 2016.
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