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U.S. Monthly Trade Deficit Zooms 5.29% to New Record
AmericanEconomicAlert.org ^ | Thursday, March 09, 2006 | Alan Tonelson

Posted on 03/09/2006 7:56:00 AM PST by Willie Green

For education and discussion only. Not for commercial use.

The January 2006 trade deficit in goods and services shot past December 2005's level, reaching a new record of $68.51 billion. The January deficit was 5.29% greater than the December total of $65.07 billion, and 1% higher than the previous monthly record of $67.84 billion set in October 2005.

Reversing a recent trend, the rise in the trade deficit was led by a big jump in the non-oil deficit. This figure rose from $46.84 billion in December 2005 to $49.59 billion in January 2006, a jump of 5.86%. The increase in the oil deficit was much slower–3.34%-- and reached $22.56 billion in January. This non-oil deficit set a new monthly record, eclipsing September 2005's mark by 4.65%.

"These worrisome January trade figures remind us more that America's global trade problems entail much more than the addiction to oil cited recently by President Bush," said Alan Tonelson, Research Fellow at the U.S. Business and Industry Council. "The January trends spotlight the continued decline of national competitiveness in 'industries of the future,' such as high-tech hardware and services, and throughout our vital manufacturing sector."

Indeed, the U.S. manufacturing sector took a big hit as well in January. The January manufactures deficit of $51.71 billion was 5.15% higher than the December total of $49.17 billion. From December to January, manufactures exports sank 4.8% from $59.98 billion to $57.11 billion. Manufactures imports dropped only slightly from $109.16 billion to $108.81 billion or 0.3%.

The trade picture was no better for advanced technology products, which traditionally have created high-wage, high-benefit jobs. The nation's trade deficit in advance technology products rose 4.4% in January from $3.23 billion to $3.38 billion. This increase was spearheaded by a nosedive in advanced technology products exports, which fell 10.06% from $20.34 billion to $18.29 billion. Advanced technology products imports decreased significantly as well, but only from $23.57 billion to $21.67 billion, an 8.07% decline.

The politically and economically significant goods trade deficit with China soared nearly 10%, from $16.3 billion in December to $17.91 billion in January. Despite China's continued rapid growth, U.S. goods exports to the People's Republic cratered in January, from $4.22 billion to $3.49 billion, a drop of 17.1%. Yet U.S. goods imports from China continued their relentless increase, rising from $20.51 billion to $21.41 billion, a 4.34% rise. These China figures contrast sharply with U.S. goods trade statistics for the European Union and Japan, where the January deficits fell by 5.15% and 3.85% respectively.

Other countries with which the goods trade deficit rose sharply include Canada (a jump of 11.07%), Mexico (8.92%), and Taiwan (49.67%).

The U.S. trade performance with India, visited recently by President Bush, continued to disappoint greatly despite considerable hype about India's rapidly growing economy and consumer market. From December 2005 to January 2006, U.S. goods exports to India plummeted 22%, from $765 million to $596 million. U.S. goods imports from India surged 19.94%, rising from $1.55 billion to $1.85 billion. As a result, the January goods trade deficit with India ballooned by 61.36% to $1.26 billion.

Said USBIC's Tonelson, "President Bush may or may not be giving away the nuclear technology store to India. But these trade figures show that the United States keep giving away the economic store."

The overall U.S. trade deficit in goods increased significantly as well, from $70.14 billion to $73.39 billion, or 4.63%. The longstanding surplus in services, however, shrank dramatically in January by 3.81%, from $5.067 billion to $4.874 billion. U.S. services exports rose only 0.65% in January, while imports increased more than twice as fast by 1.42%.

In the critical other private services category, which generates many of the economy's highest-paying jobs on average in information technology and professional services, the trade balance shrank by nearly 1% in January, from $4.45 billion to $4.41 billion. U.S. other private services exports and imports both stagnated. Yet the failure of the other private services surplus to begin increasing again means bad news for U.S. workers in these cutting-edge sectors.


TOPICS: Business/Economy; Culture/Society; Editorial; Foreign Affairs; Government
KEYWORDS: corporatism; depression; despair; doom; dustbowl; eeyore; globalism; grapesofwrath; joebtfsplk; thebusheconomy; tradedeficit; willielogic
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Related thread: Trade Deficit Hits All-Time High; Congress Must Act
1 posted on 03/09/2006 7:56:04 AM PST by Willie Green
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To: AAABEST; afraidfortherepublic; A. Pole; arete; beaver fever; billbears; Digger; ...
Said USBIC's Tonelson, "President Bush may or may not be giving away the nuclear technology store to India. But these trade figures show that the United States keep giving away the economic store."

Ping

2 posted on 03/09/2006 7:57:16 AM PST by Willie Green (Go Pat Go!!!)
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To: Willie Green
Indeed, the U.S. manufacturing sector took a big hit as well in January.

That's right, we only manufactured $3 trillion worth of goods last year.


3 posted on 03/09/2006 7:59:47 AM PST by Toddsterpatriot ( Mr. Madison, what you've just said is one of the most insanely idiotic things I have ever heard.)
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To: Willie Green

Everything is just fine. We are all well aware that all countries that developed massive foreign indebtedness have always dominated the world economic front throughout history. Nothing to worry about, nothing. Just mark the little R in November, they'll promise to fix it for next time. And then, next time, it'll be 80 billion a month instead of the crappy 65 billion.


4 posted on 03/09/2006 8:00:01 AM PST by putupjob
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To: Willie Green

Just goes to show: There's no good economic news good enough not to rain on.


5 posted on 03/09/2006 8:00:18 AM PST by Uncle Miltie (The Prophet Muhammed, Piss Be Upon Him)
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To: Willie Green
Said USBIC's Tonelson, "President Bush may or may not be giving away the nuclear technology store to India. But these trade figures show that the United States keep giving away the economic store

"free trade" is just another name for global looting of America's domestic economy. Thats all.
6 posted on 03/09/2006 8:01:34 AM PST by hedgetrimmer ("I'm a millionaire thanks to the WTO and "free trade" system--Hu Jintao top 10 worst dictators)
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To: Willie Green

What is keeping the dollar up? The market response to a trade deficit this large is for the dollar to falll relative to other currencies. Since the dollar isn't falling, that means that either the trade deficit is horribly miscalculated (unlikely) or someone is working their butts off to keep the dollar artificially high. Who is it and why are they doing it?


7 posted on 03/09/2006 8:01:37 AM PST by KarlInOhio (The tree of liberty is getting awfully parched.)
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To: Willie Green

Bush is a social conservative and economic socialist.


8 posted on 03/09/2006 8:03:12 AM PST by Fitzcarraldo
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To: hedgetrimmer

I'll remember that . . . if I ever buy a Saab, I'll run here and complain that I was "looted."


9 posted on 03/09/2006 8:04:57 AM PST by 1rudeboy
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To: hedgetrimmer

Excellently put! I may have to put that on a homemade bumper sticker.


10 posted on 03/09/2006 8:05:59 AM PST by Bikers4Bush (Flood waters rising, heading for more conservative ground. Vote for true conservatives!)
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To: Willie Green
Zooms 5.29% to New Record

5.29%, wow. I hope they don't start checking my trade deficit with my son's gymnasium, or my daughter's orthodontist.

11 posted on 03/09/2006 8:06:07 AM PST by The_Victor (If all I want is a warm feeling, I should just wet my pants.)
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To: Willie Green

for later.


12 posted on 03/09/2006 8:08:44 AM PST by CowboyJay (Rough Riders! Tancredo '08)
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To: Bikers4Bush

Just be sure to place it on an American-made auto . . . otherwise the message will be lost. I suggest a Camry, Accord, Titan, or Z4.


13 posted on 03/09/2006 8:11:33 AM PST by 1rudeboy
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To: 1rudeboy

Thanks for the suggestions but I think I'll put it on my Jeep instead. I may even make a smaller one and put it on my Harley as well.


14 posted on 03/09/2006 8:14:43 AM PST by Bikers4Bush (Flood waters rising, heading for more conservative ground. Vote for true conservatives!)
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To: Willie Green

Isn't it a new record every month?


15 posted on 03/09/2006 8:15:48 AM PST by mlc9852
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To: Bikers4Bush
Thanks for the suggestions but I think I'll put it on my Jeep instead.

You drive a German vehicle? Who would've thought.

16 posted on 03/09/2006 8:16:03 AM PST by 1rudeboy
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To: 1rudeboy

Nope, mine is pre Daimler. Nice try though, you'll have to do better next time.


17 posted on 03/09/2006 8:21:55 AM PST by Bikers4Bush (Flood waters rising, heading for more conservative ground. Vote for true conservatives!)
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To: Willie Green
Another ping along.

Trade means 'we buy from you' and 'you buy from us'. With such a policy Americans would be working in good jobs, our standard of living would increase and China would not be buying out our Government. [the 'downsize' is that political contributing Wall Street companies, who don't claim to be American companies anyway, would be making less money]

Seems like what we have for export is our 'intellectual property' like - "It's Hard Out Here for a Pimp" from HUSTLE & FLOW

18 posted on 03/09/2006 8:23:09 AM PST by ex-snook (God of the Universe, God of Creation, God of Love, thank you for life.)
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To: Bikers4Bush

"Do better?" Because you drive a Jeep and we've never met? LOL


19 posted on 03/09/2006 8:23:44 AM PST by 1rudeboy
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To: ex-snook
Seems like what we have for export is our 'intellectual property' like . . . .

Seems?

20 posted on 03/09/2006 8:25:09 AM PST by 1rudeboy
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