Soon the world will be pining for the wastrels ...
Trade Gap Shrinks Unexpectedly
Weekly Jobless Claims Fall, but Remain at High Level
By BRIAN BLACKSTONE and JEFF BATER
WASHINGTON -- The U.S. trade deficit shrank 28% in February, narrowing to its smallest in more than nine years as purchases of foreign oil and consumer goods plunged.
Separately, New U.S. claims for state unemployment benefits fell by an unexpectedly large amount last week, although they remained at very high levels consistent with more steep declines in employment.
However, total claims jumped to a fresh record high, a reflection of how hard it has become for the unemployed to find new work during the recession.
The U.S. deficit in international trade of goods and services decreased to $25.97 billion from January's revised $36.20 billion, the Commerce Department said Thursday. Originally, the January deficit was estimated at $36.03 billion.
The U.S. deficit with China also fell sharply, dropping to $14.20 billion from $20.57 billion during January.
The overall U.S. trade deficit of $25.97 billion was much smaller than expected on Wall Street. Economists surveyed by Dow Jones Newswires estimated a $36.0 billion shortfall in February. The deficit has shrank a record seven straight months; it last rose in July 2008.
The real, or inflation-adjusted, trade deficit also shrank in February, falling to $35.60 billion from $44.04 billion. That was the lowest since $32.95 billion in May 2001. Trade is a component of gross domestic product, the government's broad measure of U.S. economic activity. Analysts monitor the real deficit when trying to determine trade's effects on the overall economy. The big drop in the real deficit suggests trade added to GDP in the first quarter.
The nominal trade deficit, at $25.97 billion, was the smallest since $25.7 billion in November 1999.
U.S. exports in February climbed by 1.6% to $126.76 billion from $124.73 billion. Economies that trade with the U.S. have either slowed or fallen into recession. This week, Japan said it will craft what would be its largest supplementary budget ever to fight that nation's slump. The Organization for Economic Cooperation and Development foresees Japan's GDP dropping by 6.6% in 2009.
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The International Monetary Fund expects the global economy to shrink between 0.5% and 1% this year. The U.S. has pulled down economies around the world. Its slump began in December 2007, deepening to a point where GDP fell 6.3% at the end of 2008, the worst reading in nearly 27 years. A total 5.1 million jobs have disappeared, including 663,000 last month. Scared of a pink slip, consumers have slowed spending, and businesses trimmed of profits cut back, too. U.S. imports fell 5.1% in February to $152.72 billion from January's $160.93 billion, Thursday's trade data showed.
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U.S. purchases of foreign-made consumer goods, like toys and furniture and shoes and televisions, plunged by $1.39 billion, Thursday's trade report said. Food and feed imports fell $135 million.
Crude oil imports decreased to $10.00 billion from $11.95 billion in January as the price of oil dipped and the use plummeted. The Commerce report's average price per barrel of imported crude in February fell by 59 cents to $39.22 from $39.81. Last year, imported oil topped at $124.66 billion in July, and then started a deep slide. Oil prices stabilized in early 2009.
As for the February volume of oil imported, it fell, to 254.87 million barrels from 300.14 million in January.
The U.S. paid $13.62 billion for all types of energy-related imports, down from $16.34 billion in January.
Imports of industrial supplies, which includes petroleum products, fell by $3.58 billion. Imports of capital goods dropped $1.92 billion, led by a large decline in oilfield equipment.
Auto and related parts imports decreased $940 million.
As for exports, U.S. sales abroad of cars and parts increased $471 million.
Consumer goods exports leaped $1.32 billion. Sales of industrial supplies rose $142 million.
U.S. sales abroad of capital goods increased by $170 million during February.
Food, feed, and beverages went up $271 million.
U.S. trade deficits with some major trading partners generally fell in February, Commerce said.
The deficit with Japan was cut in about half, to $2.21 billion from $4.30 billion.
The trade gap with the euro area fell to $2.37 billion from $3.37 billion. The deficit with Canada dropped to $1.82 billion from $2.55 billion. The U.S. gap with Mexico rose, to $3.10 billion from $2.68 billion.
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