Yes, the headline number on this morning’s trade report improved. But that was misleading. In fact, the non-oil trade deficit widened for the second straight month (19.8 billion in June, 23.6 billion in July, 24.3 billion in August).
That’s not a good thing. It means that the fundamental imbalances in the global economy are reasserting themselves.
What’s worse, our trade deficit in advanced technology products is actually worse than it was a year ago, before the crisis hit. That’s a sign of a fundamental problem in what should be a U.S. strength.