The first two months of trade data are now available and it’s not a particularly pretty picture locally or nationally.
The national numbers suggest the possibility of a problem for the U.S. economy. The Miami numbers suggest una problema for Latin America.
The context is also important. The Federal Reserve has been hand-wringing over when to tighten interest rates after years of loose fiscal policy — in the next couple of months or later this year — and the March job numbers released 10 days ago were surprisingly disappointing after months of strong hiring.
Because it’s only February and only two months of import-export data are available, there is a danger in reading too much into the data.
What’s at first striking about the national numbers is the name of the No. 1 ranked Customs district. It’s not Los Angeles. It’s New York City, according to WorldCity analysis of U.S. Census Bureau data released recently. New York City has rarely finished ahead of Los Angeles on an annual basis in the last two decades.
One of those years, ironically, was 2001, the year of the New York City and Washington, D.C., terrorist strikes that hobbled the U.S. economy. The impact of the terrorist strikes, from a trade perspective, was felt most acutely in Los Angeles, which leads the nation in imports, particularly Chinese and other Asian imports that fill our stores and, eventually, homes and offices.
My guess is that this will right itself within four to six months and Los Angeles will return to its standing as the nation’s leading Customs district. In 2009, at this stage, as the U.S. economy was again reeling in what came to be known as the Great Recession, New York City was ahead of Los Angeles but finished the year in the more customary No. 2 slot.
The additional factor this year is the work slowdown that struck the West Coast, which turned the Pacific Coast into a parking lot.
Through February of this year, New York City’s trade with the world stood at $58.26 billion compared to $55.41 billion for No. 2 Los Angeles. New York City’s trade was down 1.96 percent while Los Angeles was down 14.12 percent. Overall U.S. trade was down 4.16 percent through February, to $581.16 billion, the first year below $600 billion since 2011 — when the economy was generally viewed as recovered or recovering, depending on who or what you wanted to believe.
U.S. exports were down 4.60 percent and U.S. imports were off 3.85 percent. But The U.S. trade deficit — the amount imports exceed value of exports — was $101.36 billion, the lowest two-month figure since 2010 and the third lowest total in a decade. So, for those concerned about the trade deficit, it’s not all bad news.
The balance of trade — the percentage of U.S. trade that is an export — stood at 41 percent, meaning for every dollar of U.S. trade, 41 cents was outbound. That’s basically unchanged for the last seven years, when it first began climbing above 40 cents after a number of years below.
Here in South Florida, our trade data doesn’t have much to say about what’s happening in the U.S. economy. But it often provides a pretty good glimpse into what’s going on in Latin America. Even that is shifting a little, as China becomes an increasingly important trade partner and clouds the magnifying glass a little.
But what the numbers show for what is customarily called the Miami Customs district — all of South Florida, actually — is total trade down to its lowest level since February 2011, coming on the heels of two consecutive annual declines, a rarity.
Through February, South Florida trade was down 1.38 percent, with exports off 1.13 percent and imports off 1.70 percent.
The bigger problems, as the chart shows, are with Brazil, where total trade is off 10.13 percent, and Colombia, down 14.25 percent — with both coming off down years. They are South Florida’s two most important trade partners. From a trade perspective, the news on Brazil is slightly worse than for Colombia.
It suggests that Brazil’s struggles are real and ongoing, bad news piled on bad news for an administration and nation wrestling with a wide range of issues. You can see it in some of the South Florida exports showing weakness, a large percentage of which are typically bound for Brazil: No. 2 cellphones down 10.35 percent, No. 3 computers off 8.37 percent and No. 6 printers down 2.24 percent. Even medicine was off 3.29 percent through February, when compared to the same two months of 2014.
Colombia is a little different matter. The drop in imports is essentially the continuing decline in gold imports brought through Miami and sent, until recently, to Switzerland, primarily a legacy of the global financial crisis. (I will put as asterisk by this one, because gold imports from Peru are on the upswing after an off year and exports to Switzerland up slightly after falling off a cliff.)
What is troubling, however, is that until recently, much of Colombia’s overall trade decline was limited to gold imports into South Florida. While gold accounted for most of the $106.56 million decline in Colombia imports — it wasn’t a great showing for flower imports, either — exports declined even more, $115.60 million. More significantly it ended 11 consecutive years in which exports to Colombia from Miami increased through the first two months of the year. The declines for Colombia are in those same “economic barometers” where Brazil is finding difficulty — cellphones and computers. That’s not good.
Two months do not a year make, but the first two months suggest at best that we’re out of the blocks slowly and, at worst, that the U.S. and Latin American economies have more issues that were previously apparent — and that the Fed might have one small piece of ammunition pointing toward loosening monetary policy later rather than sooner.
Ken Roberts is the founder and president of WorldCity, a Coral Gables-based company. He can be reached at email@example.com.
South Florida World Trade through February
Change in rank
February 2015 YTD
February 2015 YTD
South Florida World total
Source: WorldCity analysis of U.S. Census data