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US Trade Deficit Grows On Import Demand

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[ Business]

The latest report from the Commerce Department says the trade deficit now stands at $195.1 billion USD.

Massive demand for imported electronic devices, clothing, and oil continued its blistering pace. The first quarter numbers show an increase from the previous quarter’s $188.4 billion figures.

According to a Bloomberg report, foreign investments of $2 billion per day in Treasury bonds, stocks, and other securities have financed the gap. A worry for analysts would be if that investment came to a halt.

Jay Bryson, global economist at Wachovia Corp. in Charlotte, said: “The concern is that foreigners could decide they’re not going to finance it anymore, but we haven’t seen that yet. In the long run, it has to be corrected, but that could take a long time.”

The increased demand for imported goods reflects an increase in consumer confidence. Improvements in the job market helped confidence rise to 94.8 from 86.9 on the University of Michigan’s consumer sentiment index.

The US deficit in goods and services is responsible for about 88 percent of the current account gap. Americans imported $171.8 billion more goods and services than they exported in the first quarter.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.

US Trade Deficit Grows On Import Demand
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