Trade balance decreased even with oil prices skyrocketting. US Exports are literally booming. Annual pace of 1.6 trillion (from 1.05 trillion last year) in exports this last month.
Now....about all that government deficit spending and consumer debt????
How can the deficit be reduced? Booming exports were more than negated by even MORE booming imports.
According to the Bureau of Labor Statistics for 2007, the increased cost of imports rose more than twice as fast as the increased profits from exports.
Unless I am misreading the data, this says that costs of imports rose 1.8% while income from exports increased 0.9%. So not only were our import costs double what our exports brought in, but since we have a trade deficit and import more than we export, we probably paid out two-and-a-half times more dollars for imports than what we made in additional exports.
I call that “going backwards” or “losing money” or “increasing debt.”
What am I missing?
Here is the link...
http://www.bls.gov/news.release/pdf/ximpim.pdf
Some conclusions from the report:
U.S. IMPORT AND EXPORT PRICE INDEXES
- OCTOBER 2007 -
The U.S. Import Price Index advanced 1.8 percent in October, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, led by a 6.9 percent rise in petroleum prices. The increase followed a 0.8 percent
advance in September. Prices for U.S. exports rose 0.9 percent in October after a 0.3 percent increase the previous month.
Import Goods
The 1.8 percent rise in import prices in October was the largest monthly increase since a similar change in May 2006. The advance followed a 0.8 percent rise in September as the increase during the past two months continued
the upward trend over most of 2007 after a 0.4 percent downturn in August. The 6.9 percent increase in petroleum prices was the largest contributor to the
October increase, although nonpetroleum prices also advanced, rising 0.5 percent. Petroleum prices continued an upward trend over the past year, rising
41.4 percent for the 12 months ended in October. The increase in nonpetroleum prices in October followed a 0.2 percent decline in September. Nonpetroleum prices advanced 3.2 percent over the past year while the price
index for overall imports rose 9.6 percent for the same period.
A 1.5 percent increase in the price index for nonpetroleum industrial supplies and materials was the largest contributor to the overall rise in nonpetroleum prices in October. The advance followed declines in each of the three prior months. In October, higher prices for natural gas, chemicals, and some metals more than offset decreasing prices for building materials.
Export Goods
The 0.9 percent increase in export prices was the largest one-month gain in the index since a 1.0 percent increase in April 1995. Higher prices for both agricultural and nonagricultural exports contributed to the advance.
Agricultural prices increased 3.9 percent in October after a 4.1 percent rise the previous month and advanced 26.8 percent over the past year. The October increase was driven by a sharp rise in wheat prices, which rose 18.9 percent
following a 22.0 percent increase in September. Higher prices for soybeans, vegetables, and corn also contributed to the overall advance in agricultural prices. Nonagricultural prices increased 0.5 percent in October after recording a 0.1 percent decline the previous month. For the year ended in October, nonagricultural prices rose 3.9 percent while overall export prices advanced
5.6 percent.
The October increase in nonagricultural prices was led by a 1.2 percent rise in the price index for nonagricultural industrial supplies and materials. The advance followed a 0.3 percent downturn in September. Rising prices for
fuel, metals, and chemicals were the main contributors to the October increase.