Thursday, March 11, 2010

U.S. Trade Back to "Normal"

Marketwatch details the latest release:

After widening dramatically for two months, the U.S. trade deficit reversed course and narrowed unexpectedly in January, government data indicated, suggesting that the economic recovery remains tentative.

The trade deficit shrank a seasonally adjusted 6.6% to $37.29 billion from $39.90 billion in December, the Commerce Department said Thursday.

The one-month improvement in the deficit marked the biggest since last September.
The trade gap had jumped by 9.7% in November and by 10.5% in December -- reports that economists said had a strong-economy feel about them as the appetite for imported goods was robust.

The chart below details the longer term trend for imports and exports. For imports, an increase is a negative (a drag on GDP) whereas an increase in exports is positive (a plus on GDP). It shows that things have "normalized" after a huge reversal in post-crisis.



Source: Census