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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (65989)	6/9/2007 9:54:57 AM
From: John McCarthy	Respond to of 116555

Same cake, different ingredients .... I am LOST ..... ========================== Accelerating Growth An improvement in the trade deficit is one reason why economists project growth will accelerate to a 2.6 percent annual pace this quarter, according to the median estimate of economists surveyed this month by Bloomberg News. Economies overseas are faring better. Gross domestic product in the 13 countries that use the euro rose 3 percent in the year ended March, compared with 1.9 percent in the U.S. A weaker dollar, which makes American goods cheaper abroad, is also boosting exports. The dollar is down 6.4 percent since the beginning of last year against a trade-weighted basket of currencies of major U.S. trading partners. Chicago-based Boeing Co., the world's second-biggest airplane maker, had a record order backlog of $262 billion in the first quarter, driven largely by Asian airline customers, Chief Executive Officer Jim McNerney said last month during a conference call with analysts. Twenty of the 35 aircraft it delivered in April went to foreign buyers. An index of factory exports rose last month to the highest level since December 2004, according to a report from the Tempe, Arizona-based Institute for Supply Management last week. China Trade Gap The trade gap with China widened to $19.4 billion, the highest since January, from $17.2 billion in March. So far this year, the gap is up 19 percent compared with 2006. The deficit with China reached a record last year for a fifth straight time. Some U.S. lawmakers say an undervalued Chinese currency is to blame for the gap. Meetings last month between U.S. and Chinese officials produced agreements on financial services and aviation but not on exchange rates. ``Americans are impatient to see real change,'' Treasury Secretary Henry Paulson said in a speech this week. ``A large section of the American public doesn't believe that the benefits of trade are being shared equally between or within the two countries.'' Paulson also warned against growing protectionism in both countries and said China could help him head off such legislation in Congress by making progress in opening its markets. Federal Reserve Chairman Ben S. Bernanke has also called on China to allow its currency to move more freely. Bernanke this week also reiterated concern about the magnitude of the U.S. trade gap. ``It would be important to bring greater balance to the world financial flows,'' Bernanke told a bankers conference in Cape Town, South Africa on June 5. ``But, it is something we can do gradually over a number of years.'' To contact the reporters on this story: Courtney Schlisserman in bloomberg.com Goldman Backs Off The same day, Goldman economists threw in the towel, as have most of their counterparts on Wall Street. They said they expect GDP to increase at a 3 percent rate this quarter followed by 2.5 percent growth in the third quarter, with the unemployment rate rising from the current 4.5 percent to about 4.75 percent in the fourth quarter. That combination of growth and joblessness won't be enough to cause the Fed to act, even if inflation continues to soften, the economists said. bloomberg.com regards, John