Thursday, May 10, 2012

Trade Deficit Blow Out

Remember when we thought the U.S. was going to export our way back to prosperity riding European and emerging market aggregate demand (that wasn't a crazy statement even a year ago... promise)?

BusinessWeek details the reality:
The trade deficit widened more than forecast in March as American demand for crude oil, computers, automobiles and televisions propelled imports to a record.

The gap grew 14 percent to $51.8 billion, the Commerce Department reported in Washington today. The median estimate of economists surveyed by Bloomberg News called for an increase to $50 billion. A 5.2 percent jump in imports, the biggest in more than a year, swamped the 2.9 percent gain in exports, which also reached a record.
Change in Trade Balance - Chain-Weighted 2005 $$ (i.e. real change in 2005 dollar valuation)


With the re-emerging crisis in Europe since the March trade balance print (and what will likely be a resulting oversupply of goods coming from emerging Asia), don't expect this trend to slow any time soon.

Source: Census