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Trade gap hits 15-month high
Shipping containers are seen at the Port Newark Container Terminal near New York City in this July 2, 2009 file photo.
Credit: Reuters/Mike Segar
WASHINGTON |
WASHINGTON (Reuters) - The trade deficit hit its widest point in 15 months in March as a broadening economic recovery boosted demand for foreign goods, with a rise in exports and imports seen as a sign of growing global demand.
Both exports and imports climbed to their highest levels since October 2008, according to the report from the Commerce Department on Wednesday.
"It's an encouraging sign that growth in trade volumes is picking up, another indicator that the U.S. and global recovery is stronger," said Zach Pandl, a U.S. economist at Nomura Securities International in New York.
Some economists expect the data will lead to an upward revision in the government's measure of first-quarter economic growth.
The rise in imports more than offset the export gain and pushed the trade gap up 2.5 percent to $40.4 billion, the largest since December 2008.
The trade gap came in slightly ahead of expectations of Wall Street analysts for a deficit of $40.1 billion.
The bulk of the rise in imports reflected a jump in the dollar measure of oil imports as prices rose.
The growth in both imports and exports was stronger than the government had estimated in its first-quarter gross domestic product estimates published last month.
"The assumptions were a little bit better than expected, we now expect a modest upward revision to first-quarter GDP to 3.5 percent from 3.2 percent," Pandl said.
Financial markets largely shrugged off the report as they continued to be guided by developments surrounding the debt crisis in Europe.
U.S. stocks rose as Spain said it would take wide austerity measures to cut its budget deficit. The U.S. dollar slipped versus the euro, while Treasury debt prices fell.
EUROPEAN GROWTH CONCERNS
While worries persist that the debt crisis in Europe could slow recovery in that region, analysts expect only a marginal impact on U.S. export growth.
"The direct impact of the euro zone woes on U.S. exports should be limited," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
"While over the last 12 months, 20 percent of U.S. merchandise exports went to the entire European Union, most of them were going to the UK, Germany, the Netherlands, France or Belgium and not Greece, Portugal or Spain."
U.S. exports of goods and services increased 3.2 percent in March to $147.9 billion, led by gains for consumer goods and industrial supplies and materials. Exports of U.S. goods totaled $102.7 billion.
Combined imports of goods and services rose 3.1 percent to $188.3 billion, as the average price for imported oil rose to $74.32 per barrel, the highest since October 2008.
Imports of goods alone were also the highest since October 2008, as were individual categories for foods, feeds and beverages, industrial supplies and materials and consumer goods.
"Going forward, strong production and consumer demand should continue to support import growth over the near term," said Anna Piretti, an economist at BNP Paribas in New York.
The closely watched bilateral deficit with China widened to $16.90 billion in March from a $16.51 billion shortfall the previous month.
Separately, U.S. mortgage applications rose in the week ended May 7, driven by higher demand for home refinancing loans as interest rates reached their lowest level since mid-March, a report from the Mortgage Bankers Association showed.
Demand for loans to purchase homes fell in what was the first week following the expiration of influential federal home buyer tax credits, highlighting the vulnerability of the hard-hit housing market in the absence of key support.
(Additional reporting by Doug Palmer; Editing by Leslie Adler)
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The fact that the U.S. bureaucracy has made exporting U.S. products much more complicated than it has to be and that our government agencies that are tasked with improving exports and assisting exporters simply aren’t effective complicates the problem.
Our “Trade Agreements” are one-sided in favor of others and, are not enforced when trade partners take advantage. Hoew then can one expect to improve a situation that has been designed to fail ???????
They want American workers to work for $2/day slave labor just like China and that is exactly where we are headed come HELL or HIGH WATER.
Whenever you find yourself in a hole: “STOP DIGGING”.
It seems Harry Dingey and Paul Krugman (an American economist and Nobel Prize Winner) are the only two people in America to understand we have a Trade Problem with China?
Make no mistake about it the International Trade Deficit must be balanced one way or another if America is to SURVIVE as a Nation.
There are only three ways to correct this humongous Trade Imbalance.
1. Increase the American Exports by $450.6 Billion Dollars per year. We been trying to do this since 1993 and this is absolutely impossible.
Or
2. Decrease the American Imports by $450.6 Billion Dollars per year, then manufacture the merchandise in America. Paul Krugman wants to add a 25 percent Tax on all Imports and hopes this will reduce Chinese Imports over time.
Or
3. Pull out of NAFTA and the WTO. Then close the Largest Consumer Market in the World to all Imports. Do not worry about Exports and this will create well over 15.02 million Jobs instantly and probably even more.
I am suggesting we do number three. This can be done by the American President and Congress and will automatically bring the large American Manufactured Goods Trade Deficit into BALANCE almost over night.
But, they would rather keep borrowing and printing money to support the Chinese Economy and hope things get better. They are pushing on a string because you cannot have a meaningful recovery without good high paying manufacturing and construction jobs.
There is NO substitute for good High Paying Jobs.
The real question is do we want to create Good High Paying Jobs in America again or continue letting the International Companies make large Profits from cheap Chinese Slave Labor?
I CAN CREATE 15 MILLION JOBS ALMOST OVER NIGHT right here in America !!!
Here is my Job creation Computations:
+++++++++++++++++++++++++++++++++++++++++++++++++
Total USA Imports in 2006:
———————————-
$ 2,211.7 billion —– Total Imports.
$ – 309.4 billion —– (Money spent on Imported Crude Oil)
————————————————–
$ 1,902.3 billion / 30 billion=63.41 million jobs lost from Imports.
==================================================
Total USA Exports in 2006:
———————————-
$ 1,451.7 Billion / 30 billion=48.39 million jobs America Created from Exports.
If USA Pulls out of NAFTA and WTO right now:
USA would absolutely gain a total of 63.41 million Jobs by Manufacturing all IMPORTS right here in the USA.
So, 63.41 minus 48.39 = 15.02 million NET JOBS GAIN. But, a lot of Exports must be purchased in the USA. That would mean an even larger number of jobs created in America than I have estimated.
Also, I should note that I have subtracted out the $309.4 billion dollars that America spent on Import Crude Oil in 2006. This is another problem that must be solved later.
My calculation means an ABSOLUTE 15.02 million Jobs gained if the rest of the world did not buy even one penny of USA EXPORTS.
SO MOTE IT BE. . . . .
Do you truly want to help straighten out the United States Government now? Then, copy and post this article everyplace on the Internet you can post.
BY: Harry Dingey
Have a good day my friends.
With the exception of facial tissues, toilet paper and paper towels, and most grocery products, I haven’t seen or bought any in years.
The automobiles were generally overpriced junk designed to rust out in a few years with as low mpg efficiency as the law allows.
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