By Jason Simpkins
Associate Editor
Money Morning
The U.S. trade deficit grew in October as both the volume of oil exports and our trade deficit with China surged to a record highs. A widening deficit means the United States will not be able to rely on trade to help pull the economy out of what may be the longest recession in the post-World War II era.
The U.S. trade deficit grew to .2 billion in October, a 1.1% increase from .5 billion in September. Imports fell 1.3% to 8.9 billion, but exports fell even further, dropping 2.2% to 1.7 billion – the lowest level since January.
On reason for the reason for the larger deficit was more lopsided trade with China. The trade gap with China increased to a record billion, up from .8 billion in September. China last year supplanted Canada as the largest source U.S. imports. Since joining the World Trade Organization in 2001, China has also emerged as the fastest growing major export market for U.S. products.
A record amount of oil imports also sent the deficit soaring, offsetting a significant decline in crude prices. Petroleum import prices fell 25.8%, with the average price for a barrel of crude tumbling by .56 a barrel to .02. However, that decline was negated by a record-high 70.9 million-barrel increase in oil imports. The sheer increase in the volume of imports drove the U.S. oil bill up by 3% to .7 billion.
Trade was also dampened by a resurgent dollar, which made U.S. products more expensive to foreign markets. The dollar surged 17% from mid-July to the end of November, reaching its highest level in three years on Nov. 21, Bloomberg reported.
“Trade is going to be a significant drag on fourth-quarter growth,” Dean Maki, co-head of U.S. economic research at Barclays Capital Inc., told Bloomberg. “The slowdown in foreign demand is hitting manufacturing.”
Trade added 1.1 percentage points to U.S. economic growth in the third quarter, when gross domestic product (GDP) actually shrank by 0.5%.
There is only 1 real answer: Simply spend less than you take in! There’s Trillion in US National Debt on the books so far, and counting ( USdebtClock.org ), totaling over Trillion in unpaid for obligations, already signed into US law. Stack T dollars up, and it would go to the moon (238850 miles one-way) and back over 6 1 times! Force politicians to face the NATIONAL DEBT problems! Without decisive government spending cuts, this will certainly ruin all Americans. There is no free lunch… Believe it when credible people are ringing alarm bells, including: former US Comptroller General David Walker (Government Accounting Office), Warren Buffett, Alan Greenspan, Ron Paul, Paul O’Neill, Robert Rubin, Paul Volcker, Bob Bixby. Watch more at www.youtube.com (short movie) or www.ioUSAtheMovie.com or better yet, buy or rent the DVD! IOUSA quote “Wake up, America! We’re on the brink of a financial meltdown. IOUSA boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.”
Video Rating: 5 / 5
Question by foolishsam: Some questions about the US China trade deficit?
1.What’s America’s attitude to the trade deficit to China?
2.Is there any aggressive moves or measures will be taken by the White House or the law makers to narrow the trade gap?
3.Is China government doing something to show their sincerity to reach the balance?
4.After China abandoned the peg on the US dollar last July and took the so-called “a basket of currencies” measure, is there any influences on the trade between the US and China? And will there be any changes?
5.Is there any solutions to narrow the trade gap?
Best answer:
Answer by Whodaman?
1) Americans are like “OMG, HOW CAN THIS HAPPEN??!! BUSH, WHAT HAVE YOU DONE!!??” and Bush is like “I DIDN’T START THIS YA KNOW, YALL JUST LOVE TO IMPORT STUFF”
2) Bush: “Hu Jintao, if you don’t reduce this trade deficit, we are gonna nuke you.” Hu Jintao “OK OK!!! NO MORE DEFICIT!!!”
3) “Hmmm, how about giving some fortune cookies?”
4) not much i suppose.
5) “LETS START BUYING STUFF FROM SOUTH KOREA!!!”
=] have a nice day
Add your own answer in the comments!
Sri Lanka’s Trade Deficit Narrows In October
(RTTNews) – Sri Lanka’s trade deficit narrowed to US$ 328.6 million in October from US$ 414.3 million in the same period of last year, the Central Bank of Sri Lanka said on Wednesday.
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