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Will the Dollar be under pressure this year because of trade deficits?

*Bloomberg, by Joe Richter, September 12, 2006

Trade Deficit in U.S. Widens to a Record $68 Billion

“The U.S. trade deficit widened more than forecast in July to a record $68 billion as imports reached an all-time high and exports declined for the first time in five months.

The gap in goods and services trade follows June’s $64.8 billion shortfall, the Commerce Department said today in Washington. The increase in imports reflected record crude oil prices and more shipments of equipment, raw materials and consumer goods from overseas.

Improvement in the trade deficit may prove difficult as U.S. growth, while slowing, is still outpacing the economies of most of its trading partners. Americans’ appetites for Japanese electronics and cheaper clothing made in China may keep the shortfall close to a record in coming months even as energy prices wane and overseas shipments accelerate.

“As long as the consumer is relatively healthy, we’re going to see a wide trade deficit,” said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. “In the very short run, we may see some improvement, given that oil prices have fallen sharply” since July.

The July deficit compares with the $65.5 billion median estimate in a Bloomberg News survey of 69 economists after a previously reported $64.8 billion gap.”


*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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