This week saw some good economic news for the U.S., with the Dow cresting above 11,000
and the federal deficit projected
to be lower than anticipated. Now, in a sign that consumer demand may be on the rise, the U.S. trade deficit, which measures the gap between national
exports and imports, is up by 7.4% over the previous month. The trade
deficit climbed to $39.7 billion as both imports and exports increased,
though imports rose at a greater rate.
- How It Happened
The New York Times' Javier Hernandez, calling the
report "another piece of evidence that the recovery was gaining
momentum," explains, "Much of the increase came from imports of consumer
goods, such as televisions and apparel, as the American labor market
strengthened slightly and Americans began to spend more. Businesses
snapped up imports as they worked to restock inventories and replaced
aging equipment. Industrial supplies and capital goods, such as
machinery and tools, underpinned much of the growth."
- The Big
Picture Calculated Risk examines the news.
"In general trade has been increasing, although both imports and
exports are still below the pre-financial crisis levels. Exports boosted
the economy over the last year, however it now appears that export
growth has slowed. Imports are still increasing even with the lower oil
deficit in February."
Boost Is a Mirage Morgan Stanley's Ted Wieseman tells the Wall Street Journal, "A good portion
of the gain in imports was attributable to $0.8 billion payment for
Olympic broadcast rights that temporarily boosted services but will be
unwound next month."
- Could Slow U.S. Recovery The
Atlantic's Daniel Indivilgio cautions,
"If this trend continues -- imports increasing while exports remain
flat -- then that could limit the steepness of the economic recovery in
the U.S. If more consumer spending is increasingly benefiting firms
abroad, growth for U.S. companies will be smaller than it would have
been if that additional spending was on domestic goods and services
instead. And U.S. firms aren't making up that ground through their
exports so far in 2010."
- 'Natural Part of The Recovery'
IHS Global Insight analyst Nigel Gault sees some outliers,
though. "As U.S. producers and retailers seek to re-stock inventories,
they will pull in more imports. This is a natural part of the recovery
- China Also Running Trade Deficit The American
Scene's Walker Frost observes,
"China’s appetite for commodities and energy continues to soar. But if
the financial crisis taught us anything it’s that China’s economy is not
export-dependent, and it probably hasn’t been for some time. ... This
global economic restructuring should be welcomed so long as more value
is being created than lost."
Want to add to this story? Let us know in comments
or send an email to the author at
mfisher at theatlantic dot com.
You can share ideas for stories on the Open Wire.