MNeagle
13th April 2010, 03:00 PM
By Bob Willis
April 13 (Bloomberg) -- The trade deficit in the U.S. widened in February more than anticipated as Americans snapped up foreign-made televisions and computers, illustrating the rebound in economic growth.
The gap increased 7.4 percent to $39.7 billion from a revised $37 billion the prior month, the Commerce Department said today in Washington. Imports climbed 1.7 percent, outpacing a gain in exports that pushed sales abroad to the highest level since October 2008.
The global recovery from the worst economic slump in the post-World War II era means imports and exports will probably keep growing in coming months. Rising surpluses with emerging economies in Asia and Latin America point to gains in overseas demand that is giving companies like General Electric Co. and Dow Chemical Co. a boost.
“The pickup in imports speaks to the breadth of the recovery,†said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, who projected the gap would widen to $39.5 billion. “The deficit should narrow a little from here over the next year or two because it does look like foreign growth is pretty strong.â€
The dollar fell against the yen after the report to trade at 93.16 yen to the dollar at 11:02 a.m. in New York, from 93.24 yen late yesterday. The dollar was little changed at $1.3558 per euro from $1.3592 late yesterday.
Import Prices
Prices of goods imported into the U.S. rose less than anticipated in March, indicating few signs of building inflation pressures from abroad, another report showed. The 0.7 percent increase in the import-price index followed a revised 0.2 percent drop in February, Labor Department figures showed. Prices excluding petroleum fell 0.2 percent last month, the first decline since July 2009.
The trade gap was projected to widen to $38.5 billion from an initially reported $37.3 billion in January, according to the median forecast in a Bloomberg News survey of 73 economists. Projections ranged from deficits of $35.8 billion to $41.6 billion.
After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit grew to $42.5 billion from $40.9 billion in January. The average for the first two months of the year is larger than the $41 billion in the last three months of 2009, indicating trade may subtract from growth this quarter.
Consumer Goods
Purchases of foreign-made goods increased to $182.9 billion as demand for consumer goods, including televisions, toys, pharmaceuticals and clothing, climbed to the highest level since October 2008.
With the economy generating 162,000 jobs in March, the most in three years, U.S. consumers are beginning to spend more freely after the first back-to-back annual declines in purchases since the 1930s. That spending will probably continue to drive import growth.
U.S. companies are beginning to replenish inventories after last year’s record drawdown, also boosting demand for foreign- made goods and materials.
Exports increased 0.2 percent to $143.2 billion, led by growing foreign demand for engines and semiconductors. An $821 million drop in civilian-aircraft deliveries to buyers overseas, an often volatile category, limited the overall gain.
Sales of U.S.-made goods are getting a boost from growing demand in emerging economies. The U.S. surplus with newly industrialized countries in Asia, including Korea, Singapore and Taiwan, reached a record $2.2 billion as exports grew. Surpluses with Brazil and Argentina also climbed.
Global Demand
A growing world energy market is boosting sales of U.S.- made chemicals and drilling equipment. Dow Chemical, the largest U.S. chemical maker, is benefiting from recovering growth in markets such as Brazil, where large discoveries of oil have been made.
An 11 percent drop in the value of the dollar against a trade-weighted basket of currencies from the nation’s biggest trading partners from a five-year high reached in March 2009 is also helping spur foreign demand.
President Barack Obama has said the U.S. needs to focus on expanding exports and investment rather than depend on consumer spending as in the past. He plans to increase government-backed export financing for small businesses by 50 percent, to $6 billion a year.
Jeffrey Immelt, GE’s chief executive officer, last month said Obama’s goal of doubling U.S. exports in the next five years is “as important as anything he has done.†Immelt, during a presentation at the U.S. Export-Import Bank in Washington on March 11, said GE has started to boost payrolls in recent months.
Sales Overseas
Global demand for health-care services and locomotives will drive growth at the Fairfield, Connecticut-based company, the world’s biggest maker of jet engines, medical-imaging equipment and locomotives, Immelt said. About 50 percent of that demand will be from outside the U.S., Immelt said.
Today’s report showed the trade gap with China decreased to $16.5 billion, the lowest since March 2009, from $18.3 billion in the prior month.
U.S. Treasury Secretary Timothy F. Geithner met in Beijing this month with Chinese Vice Premier Wang Qishan amid rising pressure from American lawmakers for action to allow its currency, the yuan, to gain in value and rein in a U.S. trade gap that was $227 billion last year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIoMdaLLRCU4&pos=3
April 13 (Bloomberg) -- The trade deficit in the U.S. widened in February more than anticipated as Americans snapped up foreign-made televisions and computers, illustrating the rebound in economic growth.
The gap increased 7.4 percent to $39.7 billion from a revised $37 billion the prior month, the Commerce Department said today in Washington. Imports climbed 1.7 percent, outpacing a gain in exports that pushed sales abroad to the highest level since October 2008.
The global recovery from the worst economic slump in the post-World War II era means imports and exports will probably keep growing in coming months. Rising surpluses with emerging economies in Asia and Latin America point to gains in overseas demand that is giving companies like General Electric Co. and Dow Chemical Co. a boost.
“The pickup in imports speaks to the breadth of the recovery,†said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, who projected the gap would widen to $39.5 billion. “The deficit should narrow a little from here over the next year or two because it does look like foreign growth is pretty strong.â€
The dollar fell against the yen after the report to trade at 93.16 yen to the dollar at 11:02 a.m. in New York, from 93.24 yen late yesterday. The dollar was little changed at $1.3558 per euro from $1.3592 late yesterday.
Import Prices
Prices of goods imported into the U.S. rose less than anticipated in March, indicating few signs of building inflation pressures from abroad, another report showed. The 0.7 percent increase in the import-price index followed a revised 0.2 percent drop in February, Labor Department figures showed. Prices excluding petroleum fell 0.2 percent last month, the first decline since July 2009.
The trade gap was projected to widen to $38.5 billion from an initially reported $37.3 billion in January, according to the median forecast in a Bloomberg News survey of 73 economists. Projections ranged from deficits of $35.8 billion to $41.6 billion.
After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit grew to $42.5 billion from $40.9 billion in January. The average for the first two months of the year is larger than the $41 billion in the last three months of 2009, indicating trade may subtract from growth this quarter.
Consumer Goods
Purchases of foreign-made goods increased to $182.9 billion as demand for consumer goods, including televisions, toys, pharmaceuticals and clothing, climbed to the highest level since October 2008.
With the economy generating 162,000 jobs in March, the most in three years, U.S. consumers are beginning to spend more freely after the first back-to-back annual declines in purchases since the 1930s. That spending will probably continue to drive import growth.
U.S. companies are beginning to replenish inventories after last year’s record drawdown, also boosting demand for foreign- made goods and materials.
Exports increased 0.2 percent to $143.2 billion, led by growing foreign demand for engines and semiconductors. An $821 million drop in civilian-aircraft deliveries to buyers overseas, an often volatile category, limited the overall gain.
Sales of U.S.-made goods are getting a boost from growing demand in emerging economies. The U.S. surplus with newly industrialized countries in Asia, including Korea, Singapore and Taiwan, reached a record $2.2 billion as exports grew. Surpluses with Brazil and Argentina also climbed.
Global Demand
A growing world energy market is boosting sales of U.S.- made chemicals and drilling equipment. Dow Chemical, the largest U.S. chemical maker, is benefiting from recovering growth in markets such as Brazil, where large discoveries of oil have been made.
An 11 percent drop in the value of the dollar against a trade-weighted basket of currencies from the nation’s biggest trading partners from a five-year high reached in March 2009 is also helping spur foreign demand.
President Barack Obama has said the U.S. needs to focus on expanding exports and investment rather than depend on consumer spending as in the past. He plans to increase government-backed export financing for small businesses by 50 percent, to $6 billion a year.
Jeffrey Immelt, GE’s chief executive officer, last month said Obama’s goal of doubling U.S. exports in the next five years is “as important as anything he has done.†Immelt, during a presentation at the U.S. Export-Import Bank in Washington on March 11, said GE has started to boost payrolls in recent months.
Sales Overseas
Global demand for health-care services and locomotives will drive growth at the Fairfield, Connecticut-based company, the world’s biggest maker of jet engines, medical-imaging equipment and locomotives, Immelt said. About 50 percent of that demand will be from outside the U.S., Immelt said.
Today’s report showed the trade gap with China decreased to $16.5 billion, the lowest since March 2009, from $18.3 billion in the prior month.
U.S. Treasury Secretary Timothy F. Geithner met in Beijing this month with Chinese Vice Premier Wang Qishan amid rising pressure from American lawmakers for action to allow its currency, the yuan, to gain in value and rein in a U.S. trade gap that was $227 billion last year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIoMdaLLRCU4&pos=3