In general, the U.S. dollar has been strengthening against many of the world’s most importance currencies over the past year. Economists, among others, have been warning that a stronger dollar would eventually impact the U.S. economy, and data indicate that those impacts are now being felt. A stronger dollar means that Americans are more easily able to purchase imported products, but that foreign buyers are less able to afford American-made output.
Imports from a number of countries have predictably risen. According to the U.S. Commerce Department and as reported in the New York Times, during the first seven months of the year, imports from Vietnam totaled twenty one billion dollars, up twenty seven percent from the same period last year. Imports from Malaysia are up by seventeen percent. Meanwhile, U.S. exports have flattened, helping to explain why American manufacturers shed twenty seven thousand workers in August and September.
That represents a far cry from the manufacturing job gains recorded from the beginning of twenty thirteen to the end of twenty fourteen, when factory employment in America surged by more than three hundred thousand. Goldman Sachs expects the drag from trade on economic growth to persist through the end of twenty sixteen.
