Record US Trade Deficit: $61 Billion for February
Submitted by
CalculatedRisk on Tue, 04/12/2005 - 4:49am (6 comments)
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When you are in a hole, KEEP DIGGING!
Eventually, you will dig right down to China.
All data in the trade report are seasonally adjusted, with the exception of country balances and energy related petroleum imports. Is there any chance that what looks like light petroleum imports is seasonally normal, so not a big deal?
How much of monthly oil imports takes place under long-term contracts, so tends to stabilize prices relative to swings in spot? That is to say, shouldn't we always expect the trade data to show oil price swings much smaller than the swings DOE spot prices.
K Harris, Yes, the trade data will always show smaller swings, but if you go the this page (DOE):
This Week In Petroleum Crude Oil Section
They show both the spot prices (by week) and estimated contract prices. The contract prices are usually pretty close to the average prices reported in the Trade report.
And the final data in the trade report is seasonally adjusted. And usually the volume is a little off in Feb (short month) - so that is probably corrected in the seasonal adjustment. But my point is the price change of almost $10 in March will impact the March deficit. You can check out the raw numbers for petroleum here:
http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh17.txt
Best Regards!
Bush and the Saudi Royals are good buddies. Bosom buddies. Isn't it funny how the interests of both are catered to these days?
My, oh my. What a coincidence.....
This subject deserves a more detailed discussion.
I have spent many hours discussing various points of view with an economist friend.
Here is one of my layman issues:
I question whether we will see much of a decline in imports in terms of dollars (as opposed to unit volumes) when the dollar loses value against Asian currencies. The lack of Made in USA substitutes will have an impact.
Yes, one can assume that production may shift (in part) out of China to other foreign nations and production facilities. Fine. But the ability to reduce imports in dollar terms may be more difficult than many realize.
If more household goods are ultimately produced overseas (whatever is left), and if households still purchase some quantity of such goods, we will continue to see an import imbalance.
I agree that unit volume should slide, but believe that import trade dollars may not fall off that much until the USA is hit with a recession.
Opinions?