Trade Deficit Continues to Decline
April 9, 2009 · Posted in Global Economics
Today’s BEA report shows that the US trade deficit continued its decline in February:
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the
Department of Commerce, announced today that total February exports of $126.8
billion and imports of $152.7 billion resulted in a goods and services deficit
of $26.0 billion, down from $36.2 billion in January, revised. February exports
were $2.0 billion more than January exports of $124.7 billion. February imports
were $8.2 billion less than January imports of $160.9 billion.
This it The End of Consumerism in action. Imports to the US will continue their decline until balance is restored.
In the latter one I already wrote:
The outcome of all this is pre-ordained: The massive current account deficit will be reduced because people in the US consume less. Americans have begun to save more. There is no way this trend will stop anytime soon. China will need to export less and begin investing more domestically, while at the same time importing and buying more goods from or in the US. This will happen, whether the US government likes it or not. The End of Consumerism is in full swing. But the government’s reckless borrowing, spending and bailouts assure that this correction will take a very long time. I don’t think it is unreasonable to assume that it will take until 2020 or so until an approximate trade balance between the US and China is restored.