Thursday, June 10, 2010

Trade Deficit Widens to December 2008 Levels

Marketwatch reports:

Trade of goods and services across U.S. borders softened in April and the trade deficit rose to the highest level in more than a year, the Commerce Department estimated Thursday. Imports of goods and services dropped 0.4% to a seasonally adjusted $189.1 billion while exports declined 0.7% to $148.8 billion. The trade deficit (the difference between exports and imports) rose to $40.3 billion in April from a downwardly revised $40 billion in March. It was the largest deficit since December 2008.
While volume was down in April, the below chart shows the rebound we have seen in overall trade since volume bottomed last spring. Of interest... nominal imports have risen more than exports in percentage terms (~2.5% more) reflected in the wider trade deficit (which is also due to imports having a much higher starting balance as of last spring). The bad news is that in real terms the increase in imports has actually been less than exports (~3.5% less). In other words, things we have been importing (i.e. oil) have increased in price more than things we've been exporting.

Source: Census


  1. Looking at both this data and the increase in China's exports that was reported this morning, it seems that one could easily reach the conclusion that ongoing U.S. government 'stimulus' is stimulating the Chinese export economy, but not the U.S. export economy.

    I fail to see how this is good news. Dare one say that perhaps Paul Krugman was right, and we need to slap some tariffs on imports from China?

  2. Back to the imbalances of 2006 , or so. No wonder the stock market was partying.

  3. Would you like a free copy of my new book Free Trade Doesn’t Work: What Should Replace It and Why?

    It is neither populist fluff not dry technobabble. It is an intellectually-solid across-the-board examination of the case against free trade.

    Please have a look at the website, at, and let me know if you’d like one.

    Best Regards,
    Ian Fletcher

    Adjunct Fellow
    US Business & Industry Council
    California Office
    225 Bush St., 16th Fl.
    San Francisco, CA 94104 USA
    415.439.8377 | 415.358.4320 (fax) | 415.238.8145 (cell)