Widening Of US Trade Deficit Is Sign That Economic Woes Of Europe And China Are Hurting US Manufacturing

Wednesday, September 12, 2012 06:32
edit
Widening Of US Trade Deficit Is Sign That Economic Woes Of Europe And China Are Hurting US Manufacturing

Tags: China | Economic Outlook | U.S. economy

As in China and other countries, US exports fell in July as a result of slowing economies in Europe and other parts of the world. The value of US goods that are sold overseas fell $1.9 billion from the month of June.
 
The fall also caused the trade deficit to widen for the first time since March, reaching $42 billion from $41.9 billion in June.

This Website Is For Financial Professionals Only


 
Imports also fell because oil prices were low. This kept the deficit from widening further. But the widening of the deficit could mean that US factories will come under pressure as economies around the globe continue to struggle.
 
Estimates for US economic growth were also reined in by some analysts. They say that global economies have been winding down for a while but this is the first indication it could be affecting the US economy in a meaningful way.
 
Meanwhile, Chinese exports to the US grew, widening the trade gap with China to a record 7.2% or $29.4 billion. As other countries cut spending, US exporters will be forced to cut prices. This along with a stronger dollar will make US goods less competitive.
 
In this cycle of weakening economies it seems there will have to be one country to lead the way toward recovery. Hopefully, the recovery in the US will gain momentum as well as breadth to offer a floor that can stabilize the downward trajectory and begin to turn it around.

Comments (0)

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy