Oil Imports Swell U.S. Trade Deficit

September 11, 2009
Oil Imports Swell U.S. Trade Deficit
By JACK HEALY

The gap between what the United States imports and what it exports, which narrowed as the economy contracted, is widening again. In July, rising oil imports pushed the trade deficit to its highest point since January, the government reported on Thursday.

The trade deficit swelled by a greater-than-expected $4.5 billion to a seasonally adjusted $32 billion in July, as imports grew at a faster clip than exports. It was the largest monthly increase in the trade gap in a decade.

Still, economists greeted the latest figures from the Commerce Department as a sign that global trade was on the mend as countries around the world began recovering from the downturn.

“The global economy is picking up at a pretty decent rate,” said Brian A. Bethune, chief United States financial economist at IHS Global Insight. “We have positive growth in exports, and we have positive growth in imports.”

Trade between the United States and the rest of the world slowed sharply last year as the recession gained force, leaving container ships and tractor trailers idle and cutting traffic in some of the world’s largest ports. But trade volumes are beginning to tick up again. For the month, imports rose by 4.7 percent while exports were 2.2 percent higher, their third consecutive month of gains.

“It’s not just a one-month phenomenon,” Mr. Bethune said. “That is a very good trend.”

Auto companies exported $1.34 billion more vehicles, parts and engines to other countries, and exports of semiconductors, computers and computer accessories also grew.

Meanwhile, more auto parts flowed into the United States from places like Mexico and Canada as factories restarted their assembly plants, and crude oil imports jumped by $1.2 billion from a month earlier.

While the trade deficit has ticked up for the last two months, economists said that higher rates of savings and more cautious spending by American consumers would limit the demand for foreign-made televisions, clothes and furniture. A reluctance — or inability — to spend could limit the growth of the trade gap, they said.

Also on Thursday, the Labor Department said that first-time jobless claims fell by 26,000 last week, to a seasonally adjusted 550,000. The overall number of people receiving unemployment insurance fell by 159,000 for the week ending Aug. 29, to a total of just under 6.1 million.

The figures provided another piece of evidence that job losses were abating little by little as the recession eased. But unemployment, which hit 9.7 percent in August, is still expected to top 10 percent next year.

Source: http://www.nytimes.com/2009/09/11/business/economy/11econ.html?_r=1&hpw

Isn't there something very wrong with the Economic process slumping or whatever...because Americans have become more responsible by saving money and limiting spending to what is needed, instead of over-consuming?