9 October 2009

U.S. Trade Deficit Narrowed in August

The following is excerpted from today's edition of "New York Times".

The United States trade deficit shrank in August as oil imports fell and American businesses sent more automobiles and industrial goods to foreign markets, the government reported on Friday.

The trade deficit, which measures the gap between the value of American imports and exports, dropped to $30.7 billion. The Commerce Department’s report on trade provided another hint that global markets were waking up after a sharp downturn, and that export growth could add to the country’s total economic output in the final months of the year....

Over all, the total volume of goods and services imported and exported showed no dramatic change from a month earlier. Exports rose by $200 million to $128.2 billion, and imports fell by $900 million, to $159.8 billion.

The level of trade between the United States and the rest of the world has been picking up since the spring, as oil prices have rebounded from their winter lows of $33 a barrel and demand for consumer products and big industrial goods slowly returns....

It remains to be seen how the falling value of the dollar will affect trade as the economy recovers. While the administration — most recently, Treasury Secretary Timothy F. Geithner — has voiced support of a strong dollar, a less-valuable currency could help give American manufacturers a competitive edge by making their products cheaper overseas.

This week, the value of the dollar has fallen to its lowest point in a year as investors look for higher returns in other markets and worry about rising government debt in the United States.