As the year ends—and we near the beginning of not only 2017, but the official Donald Trump presidency—the US labor market appears to be in near-full swing. This is thanks both in part to a drop in US exports, last month, which brought the American trade deficit [in goods] higher, as well as the a drop in the number of Americans filing for unemployment.
Both reports were released on Thursday certainly indicate the labor market is in good health but, perhaps more importantly, that international trade could have an even greater impact on our national economy.
For now, the initial estimates to not include trade in services—only in goods—but the US Department of Commerce explained that the United States exported approximately $1.2 billion USD less in November than in the month prior. Imports, on the other hand, rose by $2.2 billion USD in the same period.
What does all of this have to do with president-elect Donald Trump? Well you may recall that he ran on a platform of shrinking America’s trade deficit and bring jobs back to America, jobs that American companies have moved overseas to take advantage of lower manufacturing/labor costs.
Of course, a surging US dollar could be an early scourge on Trump’s administration. This news, for example, widens the trade deficit in the United States—up $3.4 billion USD in November to reach a total of $65.3 billion USD.
Indeed, the greenback has, in fact, surged, since Trump won the presidential election on November 8—about 5 percent—with investors predicting the budget deficit would increase (and not decrease, as he had bragged). And, furthermore, that this would trigger inflation and higher interest rates from the Federal Reserve.
On the other side of this, though, is unemployment, which dropped by 10,000 applications to a seasonally adjusted 265,000 on the week of the Christmas holiday. The United States Department of Labor reports, then, that this is the 95th straight week that claims have held below 300,000, which is a strong indicator of a healthy labor market. Furthermore, this is the longest such stretch since 1970. While the number of people who continue to receive jobless benefits increased by 63,000 (to reach 2.1 million, in the week before Christmas—the highest since September 10) the unemployment rate among those who are eligible continues to hold at a modest 1.5 percent.