Economy: U.S. trade deficit hits 5-year high
“The U.S. posted its biggest monthly trade deficit in nearly five years in January,” said Jeffrey Sparshott in The Wall Street Journal. The trade gap increased 9.6 percent from the month before, to a seasonally adjusted $48.5 billion. It was the highest monthly level since March 2012, with U.S. exports falling and imports of foreign goods rising. The growing deficit highlights the forces working against President Trump’s promise “to make the nation’s commercial relationships more balanced.” The dollar has strengthened since Trump’s election, as has domestic demand for foreign goods. “Both are good signs for economic growth but would also tend to widen the trade deficit.”
It doesn’t really matter “whether the trade deficit is rising or falling,” said Neil Irwin in The New York Times. “What matters is why.” The U.S. actually exported 0.9 percent more goods in January, including an extra $1.3 billion in automobiles and $2.1 billion more in industrial supplies. But those exports were offset by even stronger spending on imported consumer goods, which reflects Americans’ rising incomes. The exact opposite happened during the 2008 recession, when the trade deficit narrowed because most Americans were poorer. “The economy is more complex than the ‘trade deficits are bad’ framing of the Trump administration.”
Tech: Uber CEO seeks ‘leadership help’
Uber CEO Travis Kalanick has pledged to get “leadership help” following a series of scandals at the ride-hailing giant, said Nina Agrawal in the Los Angeles Times. After a dashcam video emerged last week of Kalanick berating an Uber driver who dared question his business strategy, the CEO said he needed to “grow up” and would hire a chief operating officer to help run the firm. The announcement comes amid the revelation that the company developed special software to foil regulators investigating the company, a lawsuit filed by Google-owned Waymo alleging theft of trade secrets, and a viral blog post from a former employee alleging widespread sexual harassment at the company.
Aerospace: Boeing cuts 1,800 jobs in Seattle
Boeing is slashing at least 1,800 jobs in the Seattle area “as the company streamlines operations in a brutally competitive commercialaircraft market,” said Julie Johnsson in Bloomberg.com. The airplane manufacturer approved voluntary layoffs for 1,500 mechanics, while “another 305 engineers and technical workers are leaving voluntarily.” Boeing has cut its Washington state workforce by 9.2 percent to 71,036 since the beginning of 2016, as sales slowed for the company’s jetliners, “which accounted for 69 percent of total revenue last year.”
Energy: Exxon Mobil to invest $20B on Gulf Coast
Exxon Mobil touted plans this week to invest $20 billion through 2022 on the U.S. Gulf Coast, said Ernest Scheyder in Reuters.com. The energy firm intends to expand its chemical and refining plants at 11 sites across Texas and Louisiana, and create 35,000 temporary construction jobs and 12,000 permanent jobs. President Trump hailed Exxon’s announcement on Twitter, writing, “We are already winning again, America!” Some of the planned expansion began in 2013, before Trump took office, but Exxon says the scope of the investment is growing.
Autos: General Motors sells European brands
General Motors is pulling back from the European car market, said Steven Overly in The Washington Post. The Detroit automaker announced this week that it is selling its two major European brands, GM Opel and Vauxhall, to French automaker PSA Group for about $2.3 billion. GM has enjoyed record-breaking earnings in recent years, buoyed by strong U.S. sales, but it “has long lost money on its European brands.” CEO Mary Barra says the company won’t completely exit the European market, “and still plans to sell Chevrolet and Cadillac vehicles there.”