Consumers are spending their stimulus money and their extra $600 a week in unemployment benefits, and now the extra $300 a week in unemployment benefits, and their fraudulently obtained unemployment benefits. And they’re also spending the money they’re not paying to landlords because they’ve stopped making rent payments due to the eviction ban. And they’re spending the money they’re not paying to mortgage lenders because their mortgages are now in forbearance and they don’t have to make mortgage payments. And they’re spending on other stuff the money they’re not spending on airline tickets and restaurants and hotels. In other words, consumers are spending, but not always where they used to, and retail sales have hit a record in July and August, and much of this retailed merchandise was imported.
A merchandise trade deficit is a negative for the economy. And it’s a negative for the GDP calculations. It lowers GDP. The stimulus money – the portion that went overseas – stimulated the economies overseas, and these countries, steeped in their economic troubles, countered by cutting back in purchases from the US.
But the US – with the skewed its skewed incentives and the totally globalized retail giants such as Walmart and Amazon and globalized Corporate America that doesn’t care about anything other than its stock price and low costs – wants to “import itself out of trouble.”Powered by Stimulus & Rent/Mortgage Payments “Not Made,” US Trade Deficit Hits Record Worst Terrible Level Ever | Wolf Street