Friday, March 09, 2007

Lowering the Trade Deficit

BBC News - Strong exports narrow US deficit
Exports from the United States have reached a record-high, helping to narrow the country's trade deficit.

During January the gap between imported and exported goods fell to $59bn (£31bn), down from December's $61.5bn.
This is a good thing, right? Well, as you read on in the article, it almost begins to sound like a bad thing.
The strong performance of the US export industry, with exports of goods and services rising by 1.1% to a historic high of $126.7bn, was mainly driven by sales of aeroplanes, computers and agricultural products, especially soybeans and wheat.

US shoppers, meanwhile, held back spending their money on foreign cars, toys and television sets.

The trade imbalance with the European Union fell to its lowest level in three years, a reflection of the weak dollar and the strong euro, which makes US exporters more competitive and European products very expensive to American shoppers.
So we are evening out a little bit because we can't afford to buy expensive European stuff as much anymore, and Europeans finally want to buy our stuff because it is cheap. Hum. . .

I'm no economist (and really have no desire to be one), but it sounds like something of a mixed bag to me. I guess you've got to take the bad with the good.

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