Economics commentary number: HL Number 4
Title of extract: Exports Rise, But So Does Trade Deficit
Source of extract: New York Times
Date of extract: 05/12/2010
Word count: 502 words
Date the commentary was written: 05/17/2010
Sections of the syllabus to which the commentary relates: Section 3
Candidate name: Valerie Koh
Exports Rise, But So Does Trade Deficit
By CHRISTINE HAUSER
Published: May 12, 2010
Trade data released on Wednesday showed that United States imports and exports increased in March, the latest sign that the economic recovery was progressing.
The New York Times
The Commerce Department’s monthly report on trade showed a 3.1 percent increase in imports in March from the previous month and a 3.2 percent increase in exports.
The country’s trade deficit, however, increased 2.5 percent in March, to $40.4 billion, up from $39.4 billion in February. That was slightly below the $40.5 billion estimate from economists.
For the month, exports of goods and services were $147.87 billion while imports totaled $188.3 billion.
An increase in oil imports accounted for the wider overall deficit in March. When the petroleum component is subtracted, the overall deficit fell.
“The real story out of this is you are not getting as much of a boost from net exports that a lot of people had been hoping for,” said Steven Ricchiuto, chief economist at Mizuho Securities U.S.A.
But strong gains in overall trade volume suggest a global economic recovery, in addition to a stronger dollar, said Joshua Shapiro, chief United States economist for MFR Inc.
“The trade deficit is expanding a bit,” he said. “It went up for the right reason. It is going up because our economy is doing better.”
The data was the latest to suggest an upward economic trend despite unease in the markets.
Even though the unemployment rate went up to 9.9 percent in April, jobs figures released last week showed that employers added 290,000 jobs in April — the largest gain in four years.
The deficit with China rose slightly in March to $16.9 billion, from $16.5 billion in February.