Manufacturing Trade Before & After NAFTA

Here is a new industry-by-industry analysis of US/Mexico Manufacturing trade before and after NAFTA.

With the Manufacturing sector in crisis as the US enters a new recession, you may find of interest my attached analysis of US/Mexico Manufacturing and other goods trade for the three years before Nafta compared with the most recent three years.

In the three years prior to Nafta, 1991-1993, the US Manufacturing sector enjoyed a combined surplus of $19.2 billion with Mexico. However, over the most recent three years, 2005-2007, US Manufacturing continued to suffer successive record deficits totaling -$188.3 billion for the three years. Note that the US Manufacturing deficit with Mexico now far exceeds even the US deficit with Mexico for Mineral Fuels. Indeed, in 2007 the US deficit with Mexico in Electrical Machinery alone was larger than the US deficit with Mexico in Mineral Fuels.

The Crisis in Household Finances

The crisis in household finances: total hours worked and real compensation per hour both declined in Q4 and yr/yr ...worse than previously reported.

The details of today’s revised BLS report on Q4 productivity and costs are again very instructive on the state of the economy.

According to the BLS, total non-farm output in 2007-Q4 grew by even less than the BLS had estimated last month; 0.27% annualized growth rather than their earlier estimate of 0.35%. It is important to note this small downward revision to the original estimate of virtual stagnant output because the headline (and virtually only media “reporting”) is that non-farm productivity growth was revised slightly upward from the initial 1.82% annualized rate to 1.85%.

Manufacturing Jobs - US Wages Dramatic Decline

Along with the loss of -3.3 million Manufacturing jobs over the last seven years, a report just released by the BLS shows average hourly compensation for US Manufacturing jobs fell from the world’s 4th highest in 2000 to the world’s 14th highest in 2006. Japan’s Manufacturing jobs were the 2nd highest paid in 2000 but plunged to rank only 16th in 2006.