Posted on 11/12/2004 6:39:20 AM PST by 1rudeboy
By Christopher Swann in Washington
Published: November 10 2004 13:51 | Last updated: November 10 2004 13:51
The US trade deficit narrowed unexpectedly in September, reflecting a fall in energy imports and a pick up in exports, according to data released on Wednesday.
The trade shortfall fell by $1.9bn to $51.6bn, compared with forecasts of a deficit of about $53.5bn.
The figures pointed to a stronger performance by US exporters. Exports of goods climbed by $900m to $68.9bn, offsetting a $100m fall in service exports to $28.5bn. Sales of semiconductors, computers and food were particularly strong.
HSBC said the improvement in the trade position could lead to an upward revision to economic growth in the third quarter from 3.7 per cent to 4 per cent.
In addition to the rise in exports, the deficit was reduced by a fall in energy imports. Despite a 3.5 per cent rise in the price of energy per unit, the total import bill fell by $500m to $124.5bn due to a 10 per cent decline in volumes. Imports of pharmaceuticals, semi-conductors and computers also fell.
Economists said the figures were encouraging but many expect the deficit to widen again, since US growth continues to outpace the expansion in Japan or the eurozone.
Goldman Sachs dismissed suggestions that the improvement in September was due to the hurricanes in the south-east of the US, pointing out that most ports were unaffected. But in a research note published on Tuesday it said the report was unlikely to signal a turning point in the trade deficit.
The figures did little to help the dollar, which has been edging to new lows against the euro. On Wednesday, the euro hit a record high against the dollar at $1.305 before falling back to around $1.29.
Analysts have become increasingly pessimistic over the outlook for the dollar after the currency failed to rally in response to there-election of President George W. Bush and a dramatic improvement in the employment figures. The strong jobs figures at the end of last week were seen as a mixed blessing for the dollar, increasing confidence in robust growth and higher investment returns but also underlining that the deficit may expand further if US growth accelerates.
Many economists say the dollar will increasingly be dragged down by the bloated US current account deficit, despite interest rate rises by the Federal Reserve.
Import prices for October were also released yesterday showing a 1.5 per cent rise in October. This largely reflected an 11.7 per cent rise in petroleum prices.
I thought the whole world hated us and refused to do business with us...at least, that is what John sKerry and the LameStream Media kept insinuating during Campaign 2004...
Can someone clear this up for me?
Does the falling dollar help to increase our exports and reduce our imports? I don't see that mentioned in the article.
I haven't had time to look at any details, but it would be very good news if the details also show good growth in some of the harder hit areas.
If we did so right away, then the turn-around would occur during the second or third Five Year Plan.
Theoretically, a falling dollar raises exports and reduces imports.
Don't forget to force Americans to buy only $500 union made DVD's and a $90,000 union made car.. That is the best solution to protect the American factory..
No doubt. Raise the minimum factory salary to $120K/year, and watch our economy take-off. Shoot for the moon, I say.
A lower U.S. dollar makes your exports more competitive price-wise with Canada and the E.U. This is good for the U.S. manufacturing sector, likely will result in job creation.
Another good trade-off is that imported cars will be more expensive than before, resulting in growth among domestics (GM, Ford).
On the flip-side, it will be more expensive for Americans to travel abroad. There's always trade-offs when it comes to changes in the value of the dollar. Some good, some bad.
Make sure that you do your part by voting for politicians that protect you own economic interests...no matter their character.
A decline in real purchasing power is also one of the trade-offs.
The dollar is finally not under the pressure it has been for all those years, The Euro, a self made monster is helping take off the pressure which for years was hurting our economy by pricing us off the markets. With a higher per capita productivity, lower fixed costs in electricity, logistics, fuel and so on, we have been highly competitive all along, but when we had 3.56 Deutsche Mark to $1 we were being crushed by our own currency.
Now even Russia is buying Euros (mixed with dollars) for its reserve and many Ba’athists fleeing Iraq were caught with guess what? Euros. Most used currency (For trade) in the Balkans? Euros.
For years some conspiracy theorists were coming up with ever crazier ideas of how the US had an unfair advantage because of the dollar and the fact that most trade in strategic resources is conducted with this currency. In reality, our trade was being hampered by our own currency. We ended up with a currency with had a high volume of counterfeiting and regulatory issues because foreign governments would buy money or sell it causing major monetary shifts which affected our economy.
I truly believe that a lot of the devaluation of our dollar is caused by the advent of the Euro. I think in the long run this will make us MORE competitive on the world scene. Games like intentional devaluation of currency as the Italians commonly practiced with the Lira will be difficult if not impossible with the Euro. The Euro zone will have similar issues as the dollar while taking off pressure of the dollar. Only they are not as competitive and will have a harder time dealing with the pressure in the long run. In the end, US products will end up cheaper while Euro zone products will be more expensive. Imports will sink, while exports rise. But these are long term developments. In the short term businesses will suck up the costs in the hope of this trend changing. Eventually they will be forced to cave in. This will also bring MORE business into the US since our competitive advantage is now noticeable and can be taken advantage of. So Mercedes will build MLs in Mississippi and import them to Germany to sell. BMW will build Z3s to import to Germany to sell. As a manufacturing base we become more cost effective as well.
The Euro is a great thing. Hats off, I like it.
Red6
Don't forget to include BMW, Toyota, and Honda in the "domestic" column. We need to stop the scourge of insourcing ASAP!
Don't forget about Hyundai..
But...Dan Rather said it isn't so!
We do tend to benefit from the stupidity of Europeans.
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