December 19, 2005
Bad Trade Deficit News
This is a much bigger piece of news than one usually gets with a monthly release--and it's not good news. Each month the trade deficit gets bigger makes it more and more likely that we will have serious macroeconomic trouble when America's savings and investment flows start to come back into balance:
Oct trade gap widens to record $68.9 billion - Dec. 14, 2005 : REUTERS: The U.S. trade deficit widened unexpectedly in October to a record $68.9 billion despite a drop in the cost of imported oil, as the deficits with China, Canada, the European Union, Mexico and OPEC all hit records, government data showed Wednesday. Economists surveyed by Briefing.com had expected the trade gap to shrink in October to $62.8 billion, and the surprising growth in the imbalance suggests fourth-quarter economic growth will likely be even weaker than first thought.
The Commerce Department said the deficit widened 4.4 percent from September after growing 11.9 percent the previous month. Imports of goods and services rose 2.7 percent to a record $176.4 billion while exports increased a smaller 1.7 percent to $107.5 billion. While oil import prices declined in the month to an average $56.29 per barrel, the volume of crude imports surged 9.3 percent, driving the value to $17.1 billion, the second-highest on record. Imports of energy-related petroleum products, a wider category that includes propane and butane, hit a record $26.2 billion.
Posted by DeLong at December 19, 2005 11:51 AM