Sunday, June 10, 2007

US Commerce Department figures: the good news is bad news

The US Commerce Department reported on Friday a narrowing of the trade deficit in April.

What is remarkable is the positive spin on the story. When you look at the figures, exports increased by $0.25 billion, but imports fell $3.6 billion. So 94% of the improvement is simply down to reduced demand for imports. This could be interpreted as a sign that Americans are tightening their belts, rather than improving their trade.

And how do we factor the dollar's exchange rate into these import and export figures? How do the numbers actually translate into quantities of physical goods?

Also, it's still a deficit, and at $58.5 billion in one month, divided by the USA's estimated (CIA, July 2007) population of 301 million, that's $194 bucks worse off per head. Or, given the average US household size (2.59), it's $6,037 per household per year. AAA statistics show you could run a small sedan on what you're losing to overseas trade.

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