An Upturn in the U.S. Trade Deficit
November 16, 2009
The last thing the beleaguered dollar needs now would be a significant widening of the U.S. trade deficit. September’s $36.5 billion gap was 22.5% bigger than the average imbalance in the first eight months of 2008, and it included a 5.8% surge in imports, which is an outsized on-month increase. Now there is a axiom of data analysis that one observation does not make a trend, and we need to see how ensuing months develop. All the same, the spike in September was large enough to result in a third quarter deficit that was over $2.0 billion per month above the second-quarter mean. In a comparison of September results to August, China, whose currency has fallen since mid-2008 against most currencies while being pegged around 6.83 per dollar, accounted for 31.2% of the incremental growth in the U.S. trade deficit, followed by the Western Hemisphere (26.4%), OPEC (25.1%) and countries in Europe that do not participate in the European Monetary System (15.7%).
Copyright Larry Greenberg 2009. All rights reserved. No secondary distribution without express permission.
Tags: Dollar
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