U.S. trade deficit soars to record

[peejay 327]

U.S. trade deficit soars to record

By MARTIN CRUTSINGER, AP Economics Writer

America's deficit in the broadest measure of trade shot up to an all-time high in the summer, reflecting the huge jump in the country's foreign oil bill.

The Commerce Department reported Monday that the current account trade deficit increased 3.9 percent to a record $225.6 billion in the July-September quarter. That represented 6.8 percent of the country's total economy, up from 6.6 percent of the gross domestic product in the spring quarter.

The current account is the broadest measure of U.S. trade because it tracks not only the flow of goods and services across borders but also investment flows. The figure is closely watched by economists because it represents the amount of money the country must borrow from foreigners to make up the difference between what America imports and what it sells overseas.

The current account deficit is expected to hit a new record for the full year, far surpassing last year's $791.5 billion imbalance even though the shortfall for the fourth quarter is likely to show an improvement, reflecting the drop in oil prices after hitting records this summer.

Democrats, who took over control of the House and Senate in the November elections, attacked President Bush's trade policies, charging that the administration has run up record deficits for five straight years by failing to protect U.S. workers from unfair foreign trade practices.

Critics have singled out the biggest culprit as China, the country which is posting the biggest trade surpluses with the United States. A high-level delegation of seven members of Bush's Cabinet, led by Treasury Secretary Henry Paulson, held two days of talks in Beijing last week to launch a new strategic economic dialogue with China aimed at resolving long-festering trade problems between the two countries.

However, the two sides reported no breakthoughs after the initial discussions on the biggest issues such as American manufacturers' complaints that China is manipulating the value of its currency to gain trade advantages.

The $225.6 billion deficit was in line with economists' expectations. It followed a $217.1 billion shortfall in the April-June quarter and topped the previous record of $223.1 billion in the final three months of last year.

The increase in the shortfall last quarter was led by an $8.1 billion rise in the deficit in goods, which was driven higher by surging global oil prices. America's surplus in services, which includes such things as airline tickets, banking services and consultants' fees, rose by $810 million to $18.3 billion.

The deficit in investment flows — meaning that the United States is now having to pay foreigners more than Americans' earn on their overseas investments — rose by $1.6 billion to an all-time high of $3.8 billion.

Economists expect that figure to climb even higher in coming years representing the growing size of U.S. assets now in the hands of foreigners, reflecting all of the trade deficits run up over the past three decades.

The category of unilateral transfers, which includes foreign aid and pension payments to Americans living overseas, rose by $406 million to $21.5 billion in the third quarter.

http://news.yahoo.com/s/ap/20061218/ap_on_...o_ec_fi/economy

[one...two...tree 2,762]

However, the two sides reported no breakthoughs after the initial discussions on the biggest issues such as American manufacturers' complaints that China is manipulating the value of its currency to gain trade advantages.

...meanwhile we merrily shop away at places like Walmart.

According to a study by the Economic Policy Institute, America's balance-of-payments deficit with China (of which approximately $18 billion dollars is created by Wal-Mart) was responsible for the loss of 1.5 million manufacturing jobs between 1989 and 2003.

http://www.alternet.org/workplace/27829

[zyggy 9]

However, the two sides reported no breakthoughs after the initial discussions on the biggest issues such as American manufacturers' complaints that China is manipulating the value of its currency to gain trade advantages.

...meanwhile we merrily shop away at places like Walmart.

According to a study by the Economic Policy Institute, America's balance-of-payments deficit with China (of which approximately $18 billion dollars is created by Wal-Mart) was responsible for the loss of 1.5 million manufacturing jobs between 1989 and 2003.

http://www.alternet.org/workplace/27829

Amazing.. a whopping 10% of our trade imbalance is created by one company...

I'm curious to see how long we can sustain this... if all we do is keep on sending jobs overseas... who's going to pay for the stuff...

I forgot, we financing it on our rising home equity...

Oops.. we forgot that home equity can plummet if there's no one to buy your house because no one has a job... that's what's happening around here... average home prices in Michigan dropped 15% last year and people can't get out of their homes becuase they're upside down... and guess what.. they're not buying anything, so the stores are having record low sales... and they're saying we haven't even reached the bottom yet...

I'm wondering how many stores will be going out of business here because of a bad Holiday Season... and it'll just snowball after that...

We're dancing on a knife edge, with a long, long way to fall...

We're the first to see it because we have the biggest concentration of manyfacturing jobs... but if you don't think they can send your job overseas too if they want... well, you're just kidding yourself...

Edited December 18, 2006 by zyggy

[Pinocchio Liberal 268]

If its at an all time high or an all time low, it doesnt feel any different. Just another thing to biotch about.

[peejay 327]

If its at an all time high or an all time low, it doesnt feel any different. Just another thing to biotch about.

The fact is...if Ronald Reagan hadn't imposed tariffs on Jap bikes over 700cc in the early 1980's your precious Harley Davidson would have gone belly up. And you would be like all the other sheep...riding a rice burner.

[one...two...tree 2,762]

If its at an all time high or an all time low, it doesnt feel any different. Just another thing to biotch about.

The fact is...if Ronald Reagan hadn't imposed tariffs on Jap bikes over 700cc in the early 1980's your precious Harley Davidson would have gone belly up. And you would be like all the other sheep...riding a rice burner.