In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment claims, and imports and exports.
- The number of people filing for unemployment checks declined modestly in the latest week. The latest figure of 367,000 new first-time filers is close to being normal in a dynamic economic economy like the U.S. where there are lay-offs and firings even during good economic times. However, the pool of people on the unemployment dole (not the first-timers, but continuing filers) still remains high.
- In separate data news, imports and exports both increased in March. However, slightly faster growth in purchases of foreign products by U.S. consumers compared to sales growth of U.S. goods to foreigners widened the trade deficit. Imports shot up 8.4% from one year ago, while exports grew by 7.3%.
- The increase in international trade activity is good news for commercial practitioners, particularly affiliated with SIOR. Leasing and purchasing demand for industrial and warehouse spaces will be rising. Rising international trade is also good news for REALTORS® selling homes to foreign nationals. For example, there are increasingly more German homebuyers in Greenville, South Carolina because of the expanding BMW factory nearby.
- Though the widening trade deficit will hold back current economic growth by a few decimal points, the broad increases in international trade is critical to a long-term rise in standard of living. Extra international competition always forces companies to shape up and drive towards efficiency while consumers are exposed to better products.
- The falling international trade in 2008 and 2009 were due to the harsh economic recession, when the U.S. economy lost 8 million jobs and the number of people filing for unemployment checks skyrocketed. The Great Depression of the 1930s was also associated with a major collapse in international trade. Many European countries after the First World War sunk into terrible economic hardship as many newly created small-sized countries started to impose foreign tariffs (say between Croatia and Austria) which previously had not existed as part of the Austrian-Hungarian Empire. The disintegration of Soviet Union and its equivalent of the Great Depression in the 1990s was also associated the sudden collapse in border trade, say between Ukraine and Russia. In a more recent example, North Korea today is one of the poorest countries in the world because it believes principally in domestic production without foreign competition.