Summary

Critics complain about the US economy’s weak international performance in recent decades. Let’s set aside the trade balance (exports – imports) and focus just on exports. US exports occur when US goods and services are more competitive than ALL other countries in the world, subject to limits based upon transportation and purchasing costs, currency values and trade barriers. In real (inflation-adjusted) terms, US exports have increased by 180% since 1980, or 2.5% per year, year after year after year. Despite the 10% increased real cost of labor in the US, firms have leveraged their advantages, developed new products, found new markets and used better financing structures to greatly improve the US export results.

Total Goods and Services

Real goods and services exports increased by 180% from 1980 until today. They increased 9-fold in nominal terms, but consumer prices increased by 230% (3.3x).

The US Dollar fell in value significantly in the 1980’s as US inflation exceeded inflation in other countries, but has since been relatively constant against a market basket of other currencies. The increase in exports is not due to a weaker US dollar.

Goods Exports

US goods exports have increased by 140% or 2.1% per year in real terms since 1980. They have fallen from 4/5ths to a little more than 2/3rds of the total as services exports have grown more rapidly.

Agriculture

Ag exports grew very rapidly in the 1970’s and then flattened through the 80’s and 90’s before rapidly accelerating in the “oughts”. Ag exports grew by 30% in real terms over these 4 decades, a little less than 1% per year.

Industrial Supplies Exports

US chemistry based and other engineered supplies and components grew by 210%, or a strong 2.8% annually.

Petroleum Exports

From zero to something, now 10% of US exports.

Capital Goods Exports

US exports of highly engineered capital goods increased by 100%, or 1.7% per year.

Automotive Exports

Another positive result. US auto exports are up 140% in real terms, or 2.1% per year.

Consumer Goods Exports

Miscellaneous consumer goods exports increased by 340% or 3.6% annually, an amazing performance!

Services Exports

US services exports grew by 350% in these 4 decades, by 3.7% annually. The US is very competitive in the “most competitive” areas of international trade.

Summary

The US economy continues to increase its internationally competitive real exports at a rate of 2.5% per year in the long-term. The US is very well positioned to prosper in an era of increased global and free trade.