Dear CIGAs,
A sharp drop in demand for imports is to be expected from an economy driven by consumption of foreign goods. Consumption represents over 70% of GDP, so retrenchment of the consumer is bound to cause imports to decline. Unfortunately, net exports (exports less imports) continues to fall relative to GDP and import price inflation continues to soar.
Regards,
CIGA Eric
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March trade deficit drops by bigger-than-expected amount
Friday May 9, 8:54 am ET
By Martin Crutsinger, AP Economics Writer
Economic weakness trims March trade deficit with imports falling sharply
WASHINGTON (AP) -- The U.S. trade deficit narrowed sharply in March as demand for imports fell by the largest amount since the last recession was ending.
The Commerce Department reported Friday that the deficit totaled $58.2 billion, down 5.6 percent from February, a larger improvement than had been expected.
The smaller deficit reflected spreading weakness in the U.S. economy, which cut demand for imports by 2.9 percent, the largest one-month decline since December 2001, one month after the last recession ended.
The decline, which pushed imports down to $206.7 billion, was led by a 5.9 percent decrease in America's foreign oil bill. The amount of petroleum fell as the average price for crude oil jumped to an all-time high. Imports of autos and a wide variety of other consumer goods from furniture to toys and clothing also fell, reflecting the hard economic times facing U.S. consumers.
Exports, which have been one of the few strong points in this period of weakness, suffered a setback in March, falling to $148.5 billion, still the second highest level on record but down 1.7 percent from the all-time high set in February. Sales of commercial airliners, cars, computers and machinery were all down.
