Today's report of fourth-quarter U.S. gross domestic product reveals an odd feature of this recovery: As the economy has expanded, imports have not grown more rapidly. That means expansion in the U.S. is providing less benefit to other economies than expected.
Nominal imports of goods and services in the last quarter of 2013 amounted to $2.77 trillion, while nominal GDP was $17.10 trillion. So imports were 16 percent of GDP, exactly the same share as in the fourth quarter of 2010.
In contrast, imports rose to 16 percent of GDP in the fourth quarter of 2006 from 13.4 percent in the fourth quarter of 2002. If imports had risen proportionally during this recovery, they would be more than $400 billion higher today, more than 8.5 percent of GDP.
Why is this happening? Part of the explanation involves the shale oil and gas revolution in the U.S., which is far from over. From 2002 to 2006, imports of petroleum (including related products) rose by 1 percent of GDP. Over the past couple of years, however, they have been declining. The shale revolution may also be causing some manufacturing activity to relocate to the U.S.; while imports of industrial materials and supplies rose by about half a percent of GDP from 2002 to 2006, they have barely budged during this recovery. We may well see even more drastic declines in petroleum and other imports as the full impact of the shale revolution is felt.