mbossman2
10-11-2007, 10:09 AM
Trade Deficit Improves Significantly (http://biz.yahoo.com/ap/071011/economy.html?.v=2)
By Martin Crutsinger, AP Economics Writer
Record Exports Help Push Trade Deficit to Lowest Level in 7 Months
WASHINGTON (AP) -- The U.S. trade deficit fell to the lowest level in seven months, helped by record-high sales of American products and the declining value of the dollar. The deficit with China declined as imports edged down slightly following a string of high-profile recalls.
The Commerce Department reported Thursday that the deficit declined to $57.6 billion in August, down 2.4 percent from the July imbalance. It was lowest gap between exports and imports since January and a much better showing than had been expected.
While like anything, too much of something is a bad thing, but a weakening dollar appears to begin yielding some dividends.
As the dollar drops, US products become more attractive as imports and, in some cases, more attractive than domestic products.
Of course there is another edge to the sword: if the dollar drops too much then the costs of borrowing (necessary to fuel the growing exports) will begin to creep upward as interest rates must be higher to attract investors and compensate for the loss caused by declining value.
By Martin Crutsinger, AP Economics Writer
Record Exports Help Push Trade Deficit to Lowest Level in 7 Months
WASHINGTON (AP) -- The U.S. trade deficit fell to the lowest level in seven months, helped by record-high sales of American products and the declining value of the dollar. The deficit with China declined as imports edged down slightly following a string of high-profile recalls.
The Commerce Department reported Thursday that the deficit declined to $57.6 billion in August, down 2.4 percent from the July imbalance. It was lowest gap between exports and imports since January and a much better showing than had been expected.
While like anything, too much of something is a bad thing, but a weakening dollar appears to begin yielding some dividends.
As the dollar drops, US products become more attractive as imports and, in some cases, more attractive than domestic products.
Of course there is another edge to the sword: if the dollar drops too much then the costs of borrowing (necessary to fuel the growing exports) will begin to creep upward as interest rates must be higher to attract investors and compensate for the loss caused by declining value.