One of the bright signs of today’s U.S. economy has been exports: American companies are now selling more to foreign countries than ever before. So what are we selling? And why are exports doing this well? N.C. State University economist Mike Walden answers.
“In terms of what we’re selling — and of course we’re selling a lot of things — but the areas of our exports that have grown the most in recent years have been actually mineral fuels — that would include oil, particularly from shale; vehicles that we manufacture in the U.S. as well as vehicle parts, engines and other kinds of machinery; electrical equipment; and chemicals.
“The reasons, I think, for the surge in exports really fall in two areas: One, our dollar against foreign currencies has gone down, but we have a lower value dollar, on trend, over the last five years against foreign currencies. Now what that does is it makes our exports actually relatively cheaper for foreign interests to buy. And so that actually helps in terms of our export market.
“The other big factor is that U.S. workers have actually grown in terms of their efficiency. What was a number we call unit-labor costs, which is a measure of the relative cost of labor, in the U.S. has dropped 11 percent in the last 10 years. It’s been up in every European country, and only countries in Asia like China and Taiwan have seen a bigger drop than the U.S.
“So I think the combination of these two factors is really behind the surge in exports. Big question: Will it continue?”