There’s no way to dress it up nicely: a near $7 billion drop in exports between September and October and a trade deficit significantly exceeding $40 billion is abysmal news for the U.S. economy and its small- and medium-sized businesses. It’s yet one more blow to confidence that new numbers show was already faltering thanks largely to partisan gridlock among federal lawmakers.
The U.S. Census Bureau and Bureau of Economic Analysis unveiled unsettling trade statistics this week showing total October exports of $180.5 billion and imports of $222.8 billion, a goods and services deficit of $42.2 billion. The revised deficit figure was $40.3 billion in September. The $6.5 billion drop in goods and additional $300 million decreases in services exported for October represents the largest month-to-month total exporting slide since January 2009.
The news should do little for business confidence, which statistics unveiled by the National Federation of Independent Businesses this week before the new trade numbers could even be factored in illustrate is not far from the historically poorest levels. The NFIB Small Business Optimism Index dropped 5.6 points in November to a level of 87.5. The monthly index has been lower only seven times since its inception in 1986. And this can’t even be blamed on “Super Storm” Sandy – the East Coast states affected worst by the storm and its aftermath were excluded from this month’s numbers to avoid event-based distortions.
NFIB Chief Economist Bill Dunkelberg argued: "Washington does not have the needs of small business in mind; between the looming ‘fiscal cliff,’ the promise of higher healthcare costs and the endless onslaught of new regulations, owners have found themselves in a state of pessimism.”
Key categories “Expect Economy to Improve” and one measuring potential for positive “Earning Trends” each declined in excess of 30% in the latest data.
-Brian Shappell, CBA, NACM staff writer