The Trade Deficit Is Down, But There’s a Catch

The Wall Street Journal reports on the latest trade deficit numbers:

The U.S. current-account deficit sank to the lowest level in more than 14 years at the end of 2013, reflecting a smaller trade gap and better returns on assets Americans own abroad….The gap, which has narrowed 20% from a year earlier, now represents 1.9% of U.S. gross domestic product. That’s the smallest shortfall as a share of the U.S. economy since 1997.

That’s all good, but there’s a caveat: since 2009, the overall trade deficit has been flat while net imports of oil have decreased by about $50 billion per quarter. This means that net imports of all other goods have actually increased. The fracking boom is helping us out, but only temporarily. We still have a fairly chronic trade deficit problem everywhere else. More here on why this was probably inevitable.