1 big thing: The trade war is working ... kind of
U.S. manufacturers and small businesses have been hit hard by the trade war, but recent data shows that China is really suffering.
Driving the news: China's total exports fell for the 12th straight month in November, dropping 1.1% from a year ago, and exports to the U.S. have fallen more than 20%, according to China’s customs administration.
- Economists had expected shipments to rise 1%, as retailers and companies stock up for Christmas, per Reuters.
What's happening: The U.S. trade deficit declined 7.6% in October to $47.2 billion, the smallest since May 2018, as both imports and exports of goods fell. It was the second straight month the trade deficit has fallen and the largest drop since January.
- The goods trade deficit — a key benchmark of the Trump administration — is at its lowest since September 2017.
- China’s trade surplus fell to $38.73 billion in November, about $8 billion below what it was expected to be.
By the numbers:
- 27.4% drop in the goods trade deficit in October.
- 23.1% year over year decline of U.S. imports from China.
- 2.8% year over year decline in U.S. exports to China.
What they're saying: "There’s little reason for the Trump administration to back away from tariffs as the pressure on China is working," analysts from S&P Global Market Intelligence note.
But, but, but: The goods trade deficit with the EU increased 20% during the month, with U.S. imports from the EU surging to a record high, so American business owners aren't necessarily reaping the benefits.
- The Commerce Department also reported that factory orders increased 0.3% in October, but shipments were unchanged and unfilled orders were flat, indicating the recession in the U.S. manufacturing sector could continue for some time, Reuters notes.