The trade gap for goods and services increased 6.8% from a month earlier to a seasonally adjusted $45.24 billion in November, the Commerce Department said Friday. That took the monthly deficit to its highest level since February.
By the numbers, China looks like it’s on the way to dominating the global electric car industry. But subsidies and inferior technology threaten to leave it behind the rest of the world despite the big numbers. Chinese electric passenger car sales rose by 50% in 2016 to more than 300,000 cars, according to China’s state-backed auto manufacturers association, overtaking the U.S. China is targeting more than 4 million electric cars on the road over the next four years. Outside China, about 260,000 electric cars were sold world-wide last year. With electric cars, China is running into a familiar problem. It can put up big numbers but quality is uneven and subsidies spur much of the production. Last year alone, China spent nearly $15 billion on electric cars and charging stations. The production numbers paint a misleading picture of the industry. China has mostly stuck with inferior, indigenous technology, leaving the market dominated by low-cost, low-range electric car models and inconsistent charging-station standards. Anecdotally, consumers complain of flimsy and tiny cars that wouldn’t pass crash tests and batteries quickly going bad. It isn’t surprising that the main buyers of electric vehicles have been taxi fleets and government entities.
U.S. consumer spending increased modestly in November as household income failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period.
“Real gross domestic product increased by 2.2 percent in California in the second quarter of 2016, the U.S. Bureau of Economic Analysis says Wednesday. That puts California in the second tier of states for GDP growth. Rival Texas saw its GDP actually drop, down 0.2 percent, the BEA says.”
Exports fell 1.8% from September, the largest drop since January, and imports rose 1.3% in October. The fall in exports included declining shipments of soybeans, corn and consumer goods while the import rise included stronger domestic demand for foreign-made pharmaceuticals, cellphones and capital goods.
The Commerce Department on Tuesday reported that a key measure of business earnings—profits after tax without inventory valuation and capital consumption adjustments—rose 3.5% from the second quarter, its third straight quarterly increase. . . Tuesday’s report also showed that gross domestic product, a broad measure of the goods and services produced across the economy, expanded at an inflation- and seasonally adjusted annual rate of 3.2% in the third quarter, the strongest growth in two years.
Americans’ incomes and household spending advanced at a solid pace for the second straight month in October, suggesting consumers can support economic growth in the year’s final months.
Since manufacturing is the engine of economic growth, especially for the middle class, we thought we would see which states are having the sector’s best bouncebacks since the recession. Of the 32 states that average more than 100,000 manufacturing jobs overall, Michigan has attracted the largest percentage of growth with 32.49 percent since 2010. California was 24th of 32 states at 2.57 percent.
The average age of cars and light trucks hit 11.6 years old, according to IHS Markit. The firm, which collects vehicle-registration data, estimates 264 million light vehicles are in operation. Both figures are up modestly from 2015, and represent records.
The U.S. trade deficit contracted sharply in September as foreign companies snapped up American-made goods, helping the economy rebound from an ugly first half of the year.
California exports sagged in September, deflating momentum and optimism prompted by a strong rally in Golden State shipments abroad in August.
The California Department of Food and Agriculture (CDFA) announced in October, “In 2015 California’s farms and ranches received approximately $47 billion for their output. This represents a decrease of nearly 17 percent compared to 2014.” The U.S. Department of Agriculture’s National Agricultural Statistics Service said prior-year comparable receipts were $56.6 billion. That’s a revenue loss of $9.6 billion in a single year. . . It’s estimated that the average California farmer now is required to pay and be compliant with nearly 80 local, state, and federal regulatory agencies in order to grow food, fiber, and fuel for our nation’s citizens and the world.
This was supposed to be solar’s moment. Residential panel installations in the U.S. grew 71 percent in 2015 as the falling cost of panels made the power they generate more competitive. In December, Congress unexpectedly extended a tax credit set to expire at the end of 2016. . . Yet instead of energizing the industry, the extension has hurt growth, as solar companies no longer rush to meet a deadline. After jumping more than 1,000 percent since 2010, panel installations are projected to grow by only 0.3 percent in 2017, according to Bloomberg New Energy Finance.
“Sales at retail stores, online retailers and restaurants rose a seasonally adjusted 0.6% in September from the prior month, matching economists’ expectations for a rebound after sales fell 0.2% in August, the Commerce Department reported Friday. Stronger auto sales and rising gasoline prices boosted the headline figure last month, and spending excluding gas and autos rose a more modest 0.3%, though that was still the best gain in three months.”
I have just come across an International Monetary Fund working paper on income polarization in the United States that makes an important contribution to the secular stagnation debate. The authors — Ali Alichi, Kory Kantenga and Juan Solé — use standard econometric techniques to estimate the impact of declines in middle class incomes on total consumer spending. They find that polarization has reduced consumer spending by more than 3 percent or about $400 billion annually. If these findings stand up to scrutiny, they deserve to have a policy impact.