U.S. Trade Gap Drops as Exports Rise to Two-Year High (Update1)

[Godhumor]

Source: Bloomberg

Dec. 10 (Bloomberg) -- The trade deficit in the U.S. shrank more than forecast in October as a weaker dollar and growing economies overseas propelled exports to a two-year high.

The gap narrowed 13 percent to $38.7 billion, less than the lowest estimate of 78 economists surveyed by Bloomberg News and the smallest since January, Commerce Department figures showed today in Washington. Exports were the strongest since August 2008 as Mexico and China bought record amounts of U.S. products.

3M Co. and General Dynamics Corp. are among companies that will probably benefit from growing demand in markets like China, Brazil and South Korea, which this year are among the top-10 buyers of American-made goods. Imports stagnated in October as U.S. demand for crude oil plunged, an outcome that may prove to be temporary as the world’s largest economy picks up.

“Exports are likely to keep rising and imports will increase as the economy is turning around,” Zach Pandl, an economist at Nomura Securities International Inc. in New York, said before the report. “Exports are pulling up the manufacturing sector, which is more exposed to overseas growth than other parts of the economy."



Read more: http://noir.bloomberg.com/apps/news?pid=20601087&sid=auxMJHds.KMA&pos=1

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Yet another sign the economy is finally, and truly, turning the right way.

[robcon]

1. The right way? Diminshing the value of the dollar?

That reduces every American's purchasing power, risks inflation... and achieves very little by increasing exports.

[Godhumor]

3. The dollar has been weak for a long time now

A weak dollar causes a rise in demand for that country's goods, that country manufactures more, more people are hired, etc, etc. For an exporting country, a weaker currency is actually preferable to one that is too strong (One of the big reasons Japan is currently trying to figure out a good way to weaken the insanely over-valued Yen)

This is part of the economic healing, and it is reported as such.

[robcon]

5. Weakening your citizen's purchasing power is awful.

The dollar has been weak for a while - largely because it has been reduced in its role as a reserve currency.

To weaken the dollar intentionally is abominable, IMO. It's nationalistic economics, and other currencies will competitively follow suit down into the same rathole.

[muriel_volestrangler]

6. Inflation does not seem to be a danger for the US

Krugman: Disinflation continues - lowest level of core inflation ever (that's lowest since 1957).

[OHdem10]

2. It would be more meaningful if they listed the products.

At one time in the past, so many dollars of exports meant
so many thousands of new jobs. I find it most interesting
that we get percentages now. My point is: It matters what
we export.

[Godhumor]

4. I'm still looking for the numerical breakdown of goods, but I did find some commentary:

Exports of goods alone rose 4.2% to $112.3 billion. The United States exported a record amount of agricultural products in October. Exports of autos, consumer goods and industrial supplies were also strong. Exports of civilian aircraft, often a key driver of export trends, actually declined in the month.

From Marketwatch.com

[OHdem10]

7. Thanks.

[Godhumor]

9. Here, found the actual press release with numbers by product type

http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm if you want to look through for products.

[bulloney]

8. When a U.S. factory closes and moves equipment to a foreign country, the value of the equipment

counts toward our "exports."

Those import-export numbers and the corresponding jobs they supposedly create are about as bogus as a $3 bill.