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November trade deficit increases to $36.4 billion

Tue Jan 12, 2010 11:19 AM EST
business, politics, us, economy
Martin Crutsinger, AP Economics Writer
< PreviousNext >
showing 1 of 2 photos
<p>In this Jan, 5, 2010 photo, cargo ships wait to be unloaded Tuesday, Jan. 5, 2010, at the Port of Oakland in Oakland, Calif. The U.S. trade deficit jumped to the highest level in 10 months, Tuesday, Jan. 12, 2010, as an improving U.S. economy pushed up demand for imports. However, exports rose as well, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy.(AP Photo/Ben Margot)</p>

In this Jan, 5, 2010 photo, cargo ships wait to be unloaded Tuesday, Jan. 5, 2010, at the Port of Oakland in Oakland, Calif. The U.S. trade deficit jumped to the highest level in 10 months, Tuesday, Jan. 12, 2010, as an improving U.S. economy pushed up demand for imports. However, exports rose as well, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy.(AP Photo/Ben Margot)

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WASHINGTON — The U.S. trade deficit jumped to the highest level in 10 months as an improving U.S. economy pushed up demand for imports. However, exports rose as well, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy.

The Commerce Department reported Tuesday that the trade deficit jumped 9.7 percent to $36.4 billion in November, a bigger imbalance than the $34.5 billion deficit economists had forecast.

Exports rose 0.9 percent, the seventh consecutive gain, as demand was up for American-made autos, farm products and industrial machinery. Imports, however, rose a much faster 2.6 percent, led by a 7.3 percent rise in petroleum imports.

The politically sensitive deficit with China narrowed by 10.8 percent in November to $20.2 billion as U.S. exports to China hit an all-time high. Through November, the deficit with China is still the largest the United States incurs with any country but it is down 15.9 percent from the same period in 2008.

American manufacturers contend China is unfairly manipulating the value of its currency to gain trade advantages, a point President Barack Obama raised with Chinese leaders during his November visit to that country.

Through the first 11 months of 2009, the overall U.S. trade deficit in 2009 was running at an annual rate of $371.59 billion, down by nearly half from last year's imbalance of $695.94 billion. That improvement reflected a deep recession in the United States which cut sharply into consumer demand for foreign products.

But as the U.S. economy has begun to mount a recovery from the worst downturn since the Great Depression, imports have started to rise. Economists expect that development will continue in 2010 and they are predicting a higher trade deficit as a result.

However, they also contend that the fortunes of American manufacturers will be lifted by a continued rise in demand for U.S. exports as America's major overseas markets mount a recovery as well. The fall in the dollar against most major currencies since the U.S. currency hit a 2009 high last March is also expected to boost export sales.

Nigel Gault, an economist at IHS Global Insight, said he expected the trade deficit to rise by about 24 percent next year. But even with that gain, he said strong overseas demand and a weaker dollar would lift the fortunes of American manufacturers.

He said after averaging about $31 billion a month in 2009, the trade deficit for 2010 would average about $38 billion a month, still well below the $60 billion-plus deficits seen as recently as 2008.

"We believe that exports will continue to grow very strongly in 2010, but we will also be pulling in more imports because the U.S. economy is doing better," Gault said.

For November, the 0.9 percent rise in exports pushed them to $138.24 billion, the highest level for exports in a year.

Shipments of farm products were up $1.28 billion led by a big gain in sales of soybeans. Exports of capital products including semiconductors, industrial machinery and computers rose by $360 million while sales of U.S.-made autos and auto parts rose by $714 million.

The 2.6 percent rise in imports of goods and services pushed them to $174.64 billion, the highest level since December 2008. The increase was led by a 7.3 percent increase in petroleum imports which rose to $24.43 billion.The volume of crude oil imports fell to the lowest level since February 1999 but the price rose to an average of $72.54 per barrel, the highest level since October 2008.

Imports of computers, telecommunications equipment and industrial machinery were all up but imports of autos and auto parts fell by $54 million.

The expectation is that while imports will be rising in coming months, the gains in exports will continue as well, reflecting a rebounding global economy and the weaker dollar.

The global rebound is being led by China and other Asian nations. Heavy equipment maker Caterpillar Inc. is predicting that its sales will rise in 2010, reflecting in part greater demand from China and other Asian markets.

For November, the U.S. deficit with Canada dropped 32.1 percent to $1.4 billion while the imbalance with Mexico rose by 12.8 percent to $5.1 billion. The deficit with the European Union was up 30.5 percent to $6.4 billion and the deficit with Japan rose by 22.8 percent to $5.4 billion.

© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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  • Public Discussion (26)
Mr. Bill Davis

Thank Reagan and his gd stupid "Free Trade" economic theory. I hope Milt Friedman is down there in hell with dead senile former Presidential cardboard cutout Ronnie Raygun.

  • 1 vote
Reply#1 - Tue Jan 12, 2010 1:21 PM EST
California Militia

why not blame nixon for opening china up to US imports and exports.

    #1.1 - Tue Jan 12, 2010 1:55 PM EST
    LAJ1Deleted
    luckydog

    lberals are jerks - comment reported as inflammatory. Trolling is not allowed on newsvine.

    • 1 vote
    #1.3 - Tue Jan 12, 2010 2:21 PM EST
    katiestricklandDeleted
    Mr. Bill Davis

    luckydog- you have been reported and found wanting. Regards, Mr. Bill Davis

      #1.5 - Tue Jan 12, 2010 5:41 PM EST
      tyler

      Mr. Bill Davis, your comment just proved:Why liberals are jerks. Thank you.

      LAJ1 banned, gimmick troll. You can have a gimmick, but one that involves breaking the first rule on the site constantly is...unwise.

      • 3 votes
      #1.6 - Tue Jan 12, 2010 7:39 PM EST
      jdl-28

      I agree the Free Trade agreement was a bad idea and we should drop it right now, it time to stop buying all of our product from other countries period. We must start producing our own products from oil on down to everything else. If we did that our money would stay in this country help us grow and create job for the American citizen period. We also need to stop bring in H1-B and N Visa people for they are taking our jobs and working for less money, illegal also need to be remove so that would open up another 30 million jobs.

      Our government seem to want to help all the other country but their own which is telling me they do not care about thep citizens of this country other than taking their tax dollars to help others.

        #1.7 - Thu Jan 14, 2010 10:25 AM EST
        Reply
        Socrates1

        At what point will we stop the madness?

          Reply#2 - Tue Jan 12, 2010 1:22 PM EST
          LAJ1Deleted
          judi fermanich

          I thought I was the only one confused by the artifice used to explain the wonderful improvement in our economic status. Thank God! I am not alone.

          • 1 vote
          Reply#4 - Tue Jan 12, 2010 2:26 PM EST
          scoggin

          lberals are jerks - comment reported as inflammatory. Trolling is not allowed on newsvine.

          Lucky - I'll bet you didn't click on "inflammatory" about post #1 from Mr. Bill Davis did you? Well I did.

          • 2 votes
          Reply#5 - Tue Jan 12, 2010 5:34 PM EST
          luckydog

          I tend to give newcomers the benefit of the doubt gbail unless it is too egregious. A judgment call however you may notice that did not stop Mr. Davis from subsequently attacking me anyway.

          Let's be mature here folks and stay on topic and stop with the COH violations.

          In my view both Liberals and Conservatives share the blame in our poor defense of our country's economy.

          • 1 vote
          #5.1 - Tue Jan 12, 2010 6:28 PM EST
          Reply
          Real World Engineer

          Or instead of whining about areas like manufacturing (where we will never compete again.),

          We could try to develop new industries in innovative fields. Then try to make cost-effective, quality products, instead of the typical American overpriced junk.

          Seriously, things like American manufacturing are a dead horse, stop beating them. Then put energy into something useful for our economy.

            Reply#6 - Tue Jan 12, 2010 7:23 PM EST
            luckydog

            We have heard that before RWE, when we were told, Americans don't need to make shoes, clothes, plastic, steel, and they many thousands of other things we use in our daily lives. As fast as we innovate something new, it is rushed into production offshore. As someone once said, "we can't thrive doing each other's laundry." Even the service jobs like tech support, or engineering jobs can be done cheaper overseas and there is no tax incentive to keep those jobs here.We are losing the value of one of our biggest assets and that is our huge consumer base by depriving our own workers of living wage jobs. There is no reason we can't compete in manufacturing, if we have rational fair tariffs to compensate for inherent differences in our economies.

            • 1 vote
            #6.1 - Tue Jan 12, 2010 7:37 PM EST
            Reply
            judi fermanich

            I remember when the glass manufacturing industrywas moved to Mexico, and to other third world nations, a large number of years ago. Then we began to sell off a number of American designed and functional technical areas of expertise. At the beginning, our own technicians went abroad, as well. They made great amounts of money, but the workers in America, who had been servicing these industries, were left foundering. A huge hue and cry went out then.

            Government paid no attention and the Trade Agreement was not yet "de riguer". That was a method of putting out feelers, to see how much money could be made and how far the law would stretch in allowing these incursions into foreign money matters.

            The end result is, we have become a service nation, a bedroom community, whose tax base is somewhere else, in this case everywhere else.

            Americans are innovators, designers, and always have been. That is not to say that there are not the same such people in other nations. I think, at least it has been my understanding, that designers from other countries keep their designs, plans and ideas in their home country. We on the other hand, give away our own ideas to other countries, in the name of profit.

            It is time to return some semblance of what had been America back where it belongs, to the hands of Americans. They have the right to some of the wealth that is being funneled to CEO's and other movers and shakers who have determined that the money stops in their pockets. Maybe not anymore, Bigwigs. Maybe not anymore.

            Manufacturing can and should return here. But unions must take a back seat, to a degree. They no longer serve the union member. They serve themselves, an autonamous entity unto itself. That must change.

              Reply#7 - Fri Jan 15, 2010 11:22 AM EST
              luckydog

              Manufacturing can and should return here. But unions must take a back seat, to a degree. They no longer serve the union member. They serve themselves, an autonamous entity unto itself. That must change.

              I agreed with you judi right up until you bashed the unions. It is not true that they no longer serve the union member. Only 14% of work in the U.S. is now done by union labor. It is the result of the conservative assault on unions, most notably in the Reagan years that have contributed to the situation we have today. Put the blame where it belongs, not on the unions or the American worker but on corporatists that put profit over every other consideration. That willingly import products made by slave labor, child labor and made by workers under the most inhumane working conditions.

              • 1 vote
              #7.1 - Fri Jan 15, 2010 12:44 PM EST
              judi fermanich

              lucky dog, both corporate and union greed play important roles in the situations that are ongoing in America today. I cannot and will not argue with you about corporate responsibility in this fiasco. They are major players. However, regarding unions, keep in mind that union members do not contribute to the growth of a company. They are an expense. A major expense. Then, add to that that union members are not able to advance themselves except through the union. By that I mean, if you have a job description, you can only do that job, you cannot help the guy next to you do his, unless it fits your job description. Sometimes that hinders company growth. And the company was started by someone or a group who joined together to pool their money and begin a new operation. The investment on the part of the workers is their physical labor, nothing more. They have little to lose except their jobs. The owners would lose their entire investment, as well as their jobs.

              Now saying all of this, government is the organization that allowed and encouraged corporations to farm out their jobs. Collusion of the worse kinds joined together to take jobs away from Americans and give them to Indians, Thais, Chinese, and the rest.

              So there is plenty of blame to go around. Payoffs, closed door meetings that ended in money changing hands. Greedy unions wanting more without giving more into the job, also was and is to blame. So there are three entities to blame. Corporations, government and unions. To leave out any of the three is not honest.

                #7.2 - Mon Jan 18, 2010 1:44 PM EST
                luckydog

                Judi you couldn't be more wrong about unions. Union members don't contribute to a company? Many companies are almost entirely composed of union members. They make up the workforce of these companies so how can you say they don't contribute? It is their labor that built these companies.

                One person has little or no power in a company unless they are fortunate to be in upper management. Many people together in a union have a voice and that is what some companies fear. I could go on and on about the benefits of unions to both the workers and society but I doubt that would change your mind. The fact that you give so little credit to workers and their labor by your comment that "they only have their jobs to lose" makes me think that it would be a waste of time.

                • 1 vote
                #7.3 - Mon Jan 18, 2010 3:08 PM EST
                judi fermanich

                lucky dog I said they contribute their labor. And they do. But they are also an expense to the corporation, not an asset. Unions cannot rise in a company unless they leave the union. Reason, they have a job title in the union and can do nothing that is not under their pervue. They are part of the "cost of doing business".

                My Dad was in a union, most of his life. He was a machine operator. If there was trash to be picked up, a broom to use, he was not allowed to use it as it was "not his job".

                A company can mechanize and stop using people. The people do not have the skills to build their own company. They need the company more than the company needs them. Have I explained enough so you understand my position?

                I loved my Dad; indeed; I have been told I am much like him. But we fought incessantly about the fact that he did not go to college to better the lives of all of us, but rather went to the mill to keep us fed. I learned much from my Dad and admired him for what he gave up as well as for what he did. But I never accepted his union membership and the limitations that included.

                  #7.4 - Wed Jan 20, 2010 10:08 AM EST
                  luckydog

                  You should have listened to your Dad. I know many people that have risen in their field and their companies and they were good union members. Perhaps you have forgotten that President Reagan before he was the president of the United States was president of a union (yeah a real contradiction since he later became a staunch anti-unionist but still an example that one does not preclude the other).

                  • 1 vote
                  #7.5 - Wed Jan 20, 2010 1:33 PM EST
                  judi fermanich

                  luckydog, you cannot have known people who have risen in their field from within a union. They rose within the union. Not the same thing. When they rose in the company, they did so by leaving the union to become "management". That is a fact. So do not argue with me regarding this matter.

                  As for President Reagan. He was an actor. He joined the union to stay an actor. He became a union member and then rose to that presidency. He was still in the actor's union.

                  He was not the president of the union as president of the United States. His union affiliation had no bearing on his presidency. He then presided over a whole country, many of whom were not union members.

                  Just because some people join unions, does not mean they like them. Sometimes it is because of a job opening that they fit and the union just has to go along with it. That is a more total picture.

                    #7.6 - Fri Jan 22, 2010 1:15 PM EST
                    luckydog

                    Blaming the unions for the ills of the country is like blaming the janitor because the bank goes broke. Only a small fraction of the workforce is unionized.

                    As to your first comment I will argue any point I want and you do not have any authority over me to direct otherwise. Being a union member and an employee of a company are not exclusive to each other. My brother is in management in a transit agency and is still a union member in good standing.

                    As to your comment about Reagan, "duh." What was your point?

                    Some people are citizens of a city, county, state, country, whatever. Doesn't mean they like them but they like them enough to overlook what they cannot change. Same with union membership. But most people like the higher waqes and benefits being a union member brings. Do some study of American history and learn what working conditions were like before the advent of unions. Unions are simply a way to give a collective voice and power to workers that had none to counterbalance the overwhelming advantages and power of management. End of story.

                    • 1 vote
                    #7.7 - Fri Jan 22, 2010 3:55 PM EST
                    judi fermanich

                    luckydog, by degrees, I cannot argue with you. However the years have passed, and unions do not serve their members as much as they serve themselves. To believe they do is simply not true. I read heavily about unions in school and know full well what conditions were like. And unions still have a place in America. They add balance. I have not said that unions were unnecessary in American business. I said they overstep their bounds and that union officers looked out for themselves because they do.

                    Sure, you can say whatever you want, have any opinion you want. So can I. It is apparant we are looking through opposite sides of the glass, at the same thing.

                    As for President Reagan, you mentioned him first, I just filled in the blanks, so duh.

                      #7.8 - Mon Jan 25, 2010 11:56 AM EST
                      luckydog

                      Judi, we can agree to disagree.

                      I only mentioned Reagan in the context that he was a union member who rose to become a Union president but that does not mean he was confined in any way to that role. Being a member of a union does not conflict with being a good employee or an asset to a company and not just a cost as you implied.

                      Like companies, there are good unions and bad unions but that does not make unionism itself a bad thing or undesirable.

                      • 1 vote
                      #7.9 - Mon Jan 25, 2010 4:45 PM EST
                      judi fermanich

                      Your last statement is the best one. I agree with it and I stated so using different words. As long as you recognize the same thing. We appear to be on the same page.

                      And the deficit grows and America is failing. And why?

                        #7.10 - Tue Jan 26, 2010 11:20 AM EST
                        luckydog

                        At least 17 years of exporting jobs. We need fair trade not free trade.

                          #7.11 - Tue Jan 26, 2010 7:23 PM EST
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