From Deseret News archives:
March trade deficit drops by bigger-than-expected amount
The March deficit totaled $58.2 billion, down 5.7 percent from February, the Commerce Department reported Friday. It was a much larger improvement than had been expected.
The smaller deficit was driven by a 2.9 percent drop in imports, which reflected widespread weakness in demand as consumers, battered by a severe housing slump, a credit crisis and soaring gasoline prices, cut back on their purchases of both domestic goods and imports. It marked the biggest one-month decline in imports since December 2001, when the country was struggling to emerge from the last recession.
Many analysts believe the country has fallen into another recession, although the better-than-expected trade performance prompted some economists to project that growth will be revised up from the barely discernible 0.6 percent rate reported last week to a slightly more respectable 1.1 percent rate for the first three months of this year.
Mark Zandi, chief economist at Moody's Economy.com, said he still believed the current slowdown would be ruled a recession because growth will dip into negative territory in the current quarter.
"I still believe this is a recession and I think ultimately at the end of the day, it will be labeled as one," he said. He said, however, that export growth will continue to cushion the drag from housing and other weak sectors.
On Wall Street, stocks ended the week with a big decline as investors grappled with continued turmoil in the credit market and surging energy prices. The Dow Jones industrial average fell 120.90 points Friday to close at 12,745.88.
Imports totaled $206.7 billion in March, down $6.1 billion from the February level, a drop led by a 5.9 percent decrease in America's foreign oil bill. The amount of petroleum shipped into the country declined although the average price for a barrel of imported crude shot up to a record $89.85. With oil prices climbing this week to a new trading high above $126 per barrel, the March dip in oil imports was expected to be temporary.
Comments
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103
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