Friday, October 31st, 2014
True
Obama
"We now sell more products made in America to the rest of the world than ever before."

Barack Obama on Tuesday, August 6th, 2013 in a speech on homeownership

Obama says exports of U.S. goods at all-time high

American manufacturing is more than just a shaded slice in a pie chart showing what makes the country’s economy tick. In the popular mind, it’s a measure of how well the nation competes in the world and whether "we still make things."

So during a speech in Arizona, when President Barack Obama was listing the ways the economy has recovered, he made a point to include American exports.

"We now sell more products made in America to the rest of the world than ever before," Obama said.

It’s worth noting that the president specifically referred to "products made in America" in contrast to a broader view on trade that blends both goods and services. The data check on Obama’s claim is straightforward.

When tallying sales of everything from bushels of wheat to jet engines, the standard unit of measurement is dollars. The Bureau of Economic Analysis in the U.S. Commerce Department helps pull together the country’s trade statistics. The bureau’s June report showed the U.S. exported more than $134 billion worth of goods that month. That indeed is the largest dollar amount ever, even accounting for inflation. There are two important pieces of context for these numbers -- the impact of the recession and the overall trade deficit. We’ll look at the role of the recession first.

Trade numbers can bounce around from month to month so we compared the total amount of goods sold in the first half of 2013 to the first half of the years right before and after the recession.

Half year (Jan-June)

Dollars (in millions, seasonally adjusted)

Change from same period, year before

2007

$561,979

 

2008

$665,892

18.5%

2009

$507,812

-23.7%

2010

$619,101

21.9%

2011

$731,409

18.1%

2012

$779,426

6.6%

2013

$786,631

0.9%

   

Source: BEA


 

The recession took a big bite out of trade as the global economy locked up. The sale of goods fell by nearly a quarter from 2008 to 2009, again, just looking at the first half of each year. The rebound however was pretty quick. By 2011, sales were higher than just before the recession hit and they’ve continued to rise.

But the rate of increase has slowed considerably. Andrew Bernard, a trade economist at Dartmouth’s Tuck School of Business, runs the numbers a little differently but sees the same trend. The total dollars go up, but not as fast.

"Touting the current numbers as the best ever is a bit disingenuous as, by my calculations, the last 12 months are up 1.4 percent over the previous 12," Bernard said. "Not exactly booming."

Still, Bernard notes that when the country’s biggest trading partners face economic headwinds, one should expect American exports to suffer.

"Europe has been pretty stagnant, and Chinese growth has been slowing, so any increase might actually be good news," he said. Bernard said both Europe and Asia are showing signs of improvement which he expects to help U.S. exports down the line.

The balance of trade

Generally speaking, strong economies sell more to others than they buy in return. This is an area where countries like China and Germany historically have done quite well and where the U.S. has struggled. When President Obama cheered the record level of sales for American products, that didn’t address the country’s trade deficit. However, while the U.S.  is still in the red on trade, the news here also is slightly better than in the past.

The Bureau of Economic Analysis reported that the deficit for goods dropped nearly $10 billion between May and June. The average monthly deficit over the past 12 months has been about $59.5 billion. In June, it was about $53 billion.

The sale of capital goods, things like construction equipment and machinery, did the most to boost the numbers. There was a $2.3 billion rise over the past 12 months.

While the focus of this check is on goods, the sale of services regularly generates surpluses of about $18 billion to $19 billion a month that help offset the nation’s overall trade deficit. But even with that, the trade deficit for the past 12 months stands at $540 billion.

Our ruling

President Obama said the United States is selling more products made here to other countries than ever before.

We should note that the overall outlook for U.S. exports has several trouble spots: While sales are expected to grow, they will grow more slowly in the months to come. Also, the nation’s trade deficit remains high.

The president’s statement, though, focused only on the overall value of all exports. His statement was accurate, and we rate it True.

Editor's note: This report has been updated to clarify the location of the Bureau of Economic Analysis with the Commerce Department.