If you're looking for good news, consider what economists call the "current account deficit," which is a way of measuring the flow of goods and services into and out of the country. Up until around 1980, Americans tended to sell more products and services to the rest of the world than they were purchasing. Since then, dollars have been flowing out of the country at rates ranging from troubling to alarming--and in the runup to the recession, Americans were buying so much more from the world than they were selling out to it that the difference amounted to more than 5% of the total U.S. economy.
But the trend has been positive lately. Last year the deficit ran to just 2.3% of GDP, the lowest level since 1997, and it looks like the economy is starting to get back in balance with our global competitors. Part of the story is a reduction in petroleum imports--a trend which economists expect to continue. Also contributing is a small decrease in humanitarian aid flowing out of the U.S., from $34 billion down to $31.6 billion--which still represents more than a third of the $81.1 billion total.
Perhaps the most interesting component is services; last year, American businesses and consultants sold $57.92 billion more in services to the outside world than were purchased by Americans. This suggests that in an increasingly knowledge-based economy, our country is well-positioned, even against countries that live or die by export surpluses, like Japan and China.
Sources:
http://www.reuters.com/article/2014/03/19/usa-economy-currentaccount-idUSL2N0MG0MY20140319
Sincerely,
William T. Morrissey and Tammy Prouty
Sound Financial Planning Inc.
wtmorrissey@soundfinancialplanning.net
Primary Office
425 Commercial Street, Suite 203
Mount Vernon, WA 98273
Phone: (360) 336-6527
Secondary Office
650 Mullis St., Suite 101
Friday Harbor, WA 98250
(360) 378-3022
PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO BOB VERES.
