President Obama’s Export Economy

By Melissa Bynes Brooks
April 14, 2012

The accurate forecasting of export trends and developments in the foreign market place by the Obama Administration, demonstrates this administration’s competence for reviewing and analyzing financial data that affects the economy. The outcome epitomizes their proficiency for implementing strategies that influences growth in a positive direction.

The President launched the National Export Initiative (NEI) during his State of the Union address on January 27, 2010 and established a national goal of doubling U.S. exports by the end of 2014. This was to done so that U.S. Government agencies are focused and working together to ensure that U. S. companies have access to these markets, and that all companies, large and small, get the assistance they need to compete on a fair and level basis with foreign competitors.
Here is some insight regarding the steady improvement of the economy under the Obama Administration with respect to exports.

Specifically, U.S. export sales grew by more than 11 percent in 2010 in real terms, the fastest growth since 1997. In terms of job creation, the number of U.S. total export-supported jobs increased by almost 6 percent in 2010, even as the overall economy was still losing jobs.

IHS Global Insight expects trade to soften in 2012, with export values increasing only 4.8% while import values rise 5.8%, due to the Eurozone’s sovereign debt crisis. However, the driver for exports continues as fast-growing countries with increasing middle class sizes and infrastructure needs creates a demand for U.S. goods such as machinery, transportation, and chemicals industries. It’s estimated that U.S. export growth will average 8% annually over the next 10 years, outpacing imports which will advance by 4.8%. As a result, the U.S. trade deficit should continue to decrease as opportunities to sell goods globally increase.

Data released on April 12, 2012, by the U.S. Bureau of Economic Analysis and U.S. Census Bureau, showed the U.S. monthly international trade deficit decreased in February 2012. The deficit decreased from $52.5 billion (revised) in January to $46.0 billion in February, as imports decreased and exports increased. The previously published January deficit was $52.6 billion. The goods deficit decreased $6.0 billion from January to $61.4 billion in February, and the services surplus increased $0.5 billion to $15.4 billion.

Exports of goods and services increased $0.2 billion in February to $181.2 billion, reflecting an increase in exports of services. The increase in exports of services was mostly accounted for by increases in travel, other private services (which includes items such as business, professional, and technical services, insurance services, and financial services), and royalties and license fees.

Exports of goods decreased. The decrease in exports of goods was more than accounted for by decreases in automotive vehicles, parts, and engines and foods, feeds, and beverages. Increases in other goods and consumer goods were partly offsetting.

In data released by the Bureau of Economic Analysis on March 29, 2012, real gross domestic product (GDP) after changes of inflation are taken into account, increased at an annual rate of 3.0 percent in the fourth quarter of 2011 (from the third quarter to the fourth quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 1.8 percent. What’s notable here is that exports contributed to the increase in real GDP in the fourth quarter although imports, a subtraction in the calculation of GDP, increased.

Many Americans continue to grapple with higher levels of unemployment and poverty as the labor market recovery continues. However, the economy has added jobs continuously since October 2010 and had 2.2 million more jobs in February 2012 than in June 2009, when the economic recovery started. The private sector has added 2.8 million jobs during this period.

In keeping his commitment to improve the economy, President Obama continues to be engaged in economic activities and is currently attending the Sixth Summit of the Americas held in Cartagena, Colombia from April 14-15, 2012, where he will be promoting U.S.-Latin America trade ties to help accelerate private sector job growth.

References

IHS Global Insight (2012). U.S. Metro Economies: Exports in the Next Decade. Retrieved April 14, 2012, from http://usmayors.org/exportsandports/media/metro-exports-report.pdf

Istrate, E. Associate Fellow and Senior Research Analyst, and Marchio, N. Research Assistant, Metropolitan Policy Program, the Brookings Institution (2012). Export Nation 2012: How U.S. Metropolitan Areas Are Driving National Growth. Exports, Competitiveness, U.S. Economic Growth, Cities, Regions And States. Retrieved April 14, 2012, from http://www.brookings.edu/reports/2012/0308_exports.aspx#3

Kuhnhenn, J. Associated Press (2012). Obama Seeks CEOs’ Help in Latin America. In Colombia, Obama urges private sector to help governments promote jobs, prosperity. Retrieved 4/14/12, from http://finance.yahoo.com/news/obama-seeks-ceos-help-latin-173245009.html

United States of America Trade Promotion Coordinating Committee Washington, D.C. (2011). Export Strategy Powering the National Export Initiative. Retrieved April 13, 2012, from http://www.trade.gov/publications/pdfs/nes2011FINAL.pdf

U.S. Bureau of Economic Analysis and the U.S. Census Bureau (2012). February 2012 Trade Gap is $46.0 Billion. Retrieved April 12, 2012, from http://www.bea.gov/newsreleases/international/trade/tradhighlights.pdf

U.S. Bureau of Economic Analysis and the U.S. Census Bureau (2012). National Income and Product Accounts Gross Domestic Product, 4th quarter 2011 and annual 2011 (third estimate); Corporate Profits, 4th quarter 2011 and annual 2011. Retrieved April 14, 2012, from
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Weller, C.E. Weller on the State of the Economy (2012). Economic Snapshot for March 2012. Retrieved April 14, 2012, from
http://www.americanprogress.org/issues/2012/03/march_econ_snapshot.html

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