Weekly Economic Trends and Indicators
The National Headline:
The U.S. trade deficit increased by about $3.3 billion, on a seasonally adjusted basis (about 5.1%) in January moving from $64.2 billion to $67.4 billion. Exports were essentially unchanged in January at $257.2 billion while imports increased 1.1% to $324.6 billion.
For the year, the trade deficit decreased in 2023 compared to 2022, falling from $951 billion to $780 billion. This was due to a smaller deficit in goods and a larger surplus in services for 2023.
Local Statistics:
The International Trade Administration (part of the Department of Commerce) recently released trade statistics for individual metropolitan areas for 2022. The Davenport-Moline-Rock Island IA-IL Metropolitan Statistical Area (MSA) exported $8.2 billion worth of goods in 2022 (most recent year available). This is up from $6.3 billion in 2021. We ranked 47th out of 389 metropolitan areas. This was up from 52nd in 2021. Considering that the Quad Cities is the 147th largest MSA by population, this is evidence of the disproportionately large influence of international trade on the economy.
Machinery (3-digit NAICS code 333) accounted for $5.4 billion of the total $8.2 billion in exports from the Quad Cities. This puts us in the top 10 metro areas in the country for machinery production. The Quad Cities was also in the top 50 metro areas in the following industries:
- Fish and other marine products (3-digit NAICS code 114)
- Beverage and tobacco (3-digit NAICS code 312)
- Leather and allied products (3-digit NAICS code 316)
- Primary metal manufacturers (3-digit NAICS code 331)
- Transportation equipment (3-digit NAICS code 336)
The Context:
The balance of trade is affected by many factors. Among the most important of these are the overall strength of the domestic and international economies (as measured by GDP) and the value of the dollar on the world currency markets.
You can see both effects in recent data. As global economies recovered in 2022 from the COVID recession, U.S. (and local) exports increased significantly. Moving into 2023, the recovery was basically complete, and movements in the dollar had a more noticeable effect. As we look forward to potential interest rate cuts in 2024, this would be expected to help export manufacturers at the local and national level. However, overseas economies may be slowing, which would work in the other direction. Locally, since many of our exporters produce capital goods, the global demand for those goods will be determined more by long-term expectations for the dollar and global GDP, which remain mostly stable at the present time.
Next week: Local and national employment report
