How explosive is the Trade Gap crisis?
*AP, by Martin Crutsinger, October 12, 2006:
Soaring Oil Prices Push Trade Deficit to Another Record in August
"America's trade deficit hit an all-time high as record imports of oil
swamped a solid gain in U.S. exports. The politically sensitive deficit
with China set a record, a point that Democrats are sure to use in
attacking President Bush's trade policies in the closing weeks of the
battle for Congress.
The deficit rose to $69.9 billion in August, up 2.7 percent from July's
$68 billion deficit, which had also been a record. The sharp
deterioration in the deficit in recent months has occurred because
soaring global oil prices have pushed America's foreign oil bill to
historic highs.
Analysts believe the deficit will begin to show improvements in coming
months, reflecting the fact that oil prices, which had surged to $77
per barrel in July, have fallen by about 25 percent since that time.
In a second report, the number of newly laid off workers filing for
unemployment benefits rose by 4,000 last week to a seasonally adjusted
total of 308,000.
The widening trade gap occurred even though U.S. exports of goods and
services set a record, rising by 2.3 percent to $122.4 billion. This
increase, however, was offset by a 2.4 percent rise in imports, which
also set a record at $192.3 billion.
The trade deficit is on track to set a record for a fifth consecutive
year, running at an annual rate through August of $784.2 billion, 9.4
percent higher than last year's $716.7 billion record."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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