Awful reporting on the Biden-Harris economy by the New York Times and other major media outlets played a big role in putting Donald Trump in the White House. My guess is that relatively few of its highly informed readers knew that real wages grew at a healthy pace under Biden. Or that the most rapid growth in wages was for the least well-paid workers. They probably didn’t know that there were record rates of new business formation. Or that home ownership rates for young people were higher for Biden’s entire term than the best year of the first Trump administration.

That’s all water under the bridge now, but it would be nice if the major news outlets could get the story right going forward. They sure are not doing it now.

In a piece discussing the merits of Trump’s idea of having balanced trade with each country, the NYT told readers:

“Some economists do agree with the Trump administration that America’s overall trade deficit with the rest of the world reflects a problem for the U.S. economy, because the United States is so dependent on manufacturing elsewhere, including in China. The U.S. trade deficit hit a record $1.2 trillion last year, as imports surged.”

The problem with this assertion is that the trade deficit did not hit $1.2 trillion last year. It was $903.1 billion. This was not a record in absolute terms; it was $958.9 billion in 2022, and it certainly was not a record as a share of GDP. That peaked at 5.7 percent in 2005 and 2006. By comparison, it was 3.1 percent last year.

It’s possible that the piece was referring to the deficit on merchandise trade. This excludes services like travel, shipping, royalties and licensing fees, and financial services. Our trade deficit on goods was $1.2 trillion last year, which is a record, although not as a share of GDP. The record deficit for goods alone was 6.2 percent in 2005 and 2006. By comparison, it was 4.1 percent of GDP last year. Here’s the picture.

It is not clear why the NYT would exclude services from the trade deficit. Definitionally it is just wrong. Trade refers to both goods and services. If the paper is using the term “trade deficit,” then it is implying both goods and services.

Also, as a practical matter, I’m not sure even the Trump administration has argued that we should have balanced trade in goods alone. We have been running large surpluses on service trade for many decades. Is there something wrong with selling shipping or banking services instead of steel and shoes?

The NYT also badly misled readers by referring to the absolute size of the deficit instead of expressing it as a share of GDP. It would be totally reasonable to expect the trade deficit to hit a record high most years, just like consumption and investment hit record highs almost every year. That is a meaningless assertion, but it does lend credence to Trump’s claim that it is a serious problem.

Pointing out that the trade deficit, either with or without services, is far from a record share of GDP, would make it clear to readers that it is not an obvious problem. The NYT has again badly failed its readers in a situation where it should have been very easy to get the numbers right.