There has been much ado about how manufacturing and exports are leading the recovery. Just how much they are contributing to lackluster growth depends on your point of view and what statistics are in your arsenal.
Friday's jobless numbers revealed manufacturing employment increased 31,000 in January to 11.9 million jobs. It has risen 3 percent since last February, a slight improvement compared to overall job growth of 2.7 percent over the same period.
Friday also brought news that the nation's trade deficit grew to $52.6 billion in January, as a 2.1 percent increase in imports overwhelmed 1.4 percent growth in exports.
Oil imports accounted for about a third of the latest bulge in the trade deficit, according to IHS Global Insight economist Gregory Daco. He said it is the third consecutive month that the deficit has widened by more than $2 billion.
The deepening deficit notwithstanding, two reports issued last week and based on 2010 figures for major metropolitan areas highlighted advances on the export front.
The Brookings Institution placed Pittsburgh 23rd on its list of cities powering the U.S. recovery, with 2010 exports valued at $11.1 billion. The U.S. Department of Commerce's International Trade Administration ranked Pittsburgh three spots higher, in 20th place with 2010 exports of $12.2 billion vs. $8.3 billion in 2009.
Among other Pennsylvania metro areas the federal agency looked at, exports rose 19 percent in Philadelphia in 2010 to $22.7 billion, fell 24 percent in Erie to $1.1 billion and rose 40 percent in Altoona to $221 million.
Brookings senior research analyst Emilia Istrate said the think tank's numbers are based on where exported products were produced while the Commerce Department numbers are based on where they were shipped from.
"Pittsburgh has great export potential. It can do much better than it did before the recession," she said.
Ms. Istrate said exports grew faster in 2010 than in any year since 1997 and are helping the nation move out of the recession. The report looked only at export growth and did not consider the trade deficit or policies to address that, she said.
However, you will get a more sobering picture if you compare the growth of exports with the growth of imports or examine the difference between the growth rate of the manufacturing deficit -- the difference between exports and imports of manufactured goods -- and the overall trade deficit.
The Manufacturers Alliance for Productivity and Innovation, an Arlington, Va., research institute, reported last week that even though U.S. manufacturing exports jumped 12 percent, or $123 billion, last year, the U.S. manufacturing trade deficit grew 12 percent to $48 billion. That is comparable to the pace at which the overall trade deficit deepened.
At the end of 2011, the manufacturing trade deficit stood at $463 billion, $11 billion larger than it was at the end of 2008.
In lay terms, U.S. producers may be selling more goods overseas, but U.S. consumers are stepping up purchases of overseas goods at an even faster clip.
Ernest H. Preeg, the institute economist who compiled the report, said the $48 billion increase in the manufacturing trade deficit translates into the loss of 200,000 to 400,000 manufacturing jobs.
Mr. Preeg reported that China's manufacturing exports jumped 20 percent, or $302 billion, last year. The country's manufacturing trade surplus was $659 billion as of Dec. 31, up 14 percent since the end of 2008.
"They've come up like gangbusters in the high-tech industries, which is the whole Chinese strategy," Mr. Preeg said.
He predicts that by 2015, China's manufacturing exports will be double what U.S. manufacturers export. By comparison, U.S. manufacturing exports were three times bigger than China's in 2000.
Critics say China's burgeoning trade surplus is fueled by subsidies, including an undervalued currency, that make its exports more competitive. Mr. Daco said that criticism should be tempered to the extent that U.S. manufacturers use cheap Chinese imports to make products they export.
"In that sense, it's a good thing for U.S. manufacturers," he said.
But one critic of China's current policies and President Barack Obama's response to those policies said the White House pledge to double exports in five years won't mean much unless the export push shrinks the U.S. trade deficit.
Alan Tonelson, of the U.S. Business and Industry Council, which represents about 2,000 small and medium-size manufacturers, said exports have strengthened whenever the U.S. economy weakens but not enough to change the direction of the economy. When the economy strengthens, the U.S. trade deficit expands and detracts from growth, he said.
Friday's figures show the trade deficit at its highest level since October 2008, showing "that the U.S. economy remains incapable of generating even modest growth without amassing more debt," Mr. Tonelson said in an email.
Yet for some reason, the Obama administration focuses on export growth without mentioning the worsening trade deficit picture, he said.
"Certainly President Obama has access to people who know better and for some reason has been ignoring economic reality," Mr. Tonelson said.
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