Trade deficit drops to $39.9B; lowest in 6 years

[one...two...tree 2,762]

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – The U.S. trade deficit fell to the lowest level in nearly six years in December as the recession depressed demand for imports. The trade deficit in 2008 fell for a second straight year and economists expect an even bigger decline this year.

The Commerce Department said Wednesday that the deficit in December fell 4 percent to $39.9 billion, from $41.6 billion in November. It was slightly higher than the $36 billion deficit economists expected.

For the year, the deficit shrank by 3.3 percent to $677.1 billion. It was the second straight annual decline after five straight years of record deficits.

The 2008 imbalance was the lowest annual total since 2004, and many economists believe the deficit for 2009 will be half the size of last year's gap. However, the improvement is due to a painful recession that is cutting demand for imports of oil, autos and other foreign-made products.

The politically sensitive deficit with China continued rising in 2008, hitting an all-time high of $266.3 billion, the highest imbalance ever recorded with any country. The deficit with China has set records throughout the decade, triggering a political backlash with growing calls for trade sanctions against Beijing for what critics contend are unfair trade practices that have cost American manufacturing jobs.

Still, Chinese exports are not immune to the effects of recession. China's exports plunged in January amid collapsing global demand, according to customs data released Tuesday. Exports fell 17.5 percent last month compared with the year-ago period, and a sharper drop than December's 2.8 percent.

The Bush administration resisted pressure in Congress to brand China a currency manipulator, a designation that could lead to trade sanctions. However, Treasury Secretary Timothy Geithner told Congress last month that President Barack Obama believes China is manipulating its currency, raising the possibility that the new administration will take a harder line.

During the presidential campaign, Obama pledged to do a better job than Republicans at protecting American workers from unfair trade practices. There are concerns the U.S. recession and downturns in many other countries could lead to rising protectionism worldwide that will make the global recession worse.

The back-to-back annual declines in the U.S. trade deficit were the first time that has occurred since it fell for four straight years in the late 1980s and early 1990s.

http://news.yahoo.com/s/ap/20090211/ap_on_...o_ec_fi/economy

[I AM NOT THAT GUY 5,715]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

[one...two...tree 2,762]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

[I AM NOT THAT GUY 5,715]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

The "imperial" they!

[one...two...tree 2,762]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

The "imperial" they!

Oh come on now. You were referring to liberals, no?

[I AM NOT THAT GUY 5,715]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

The "imperial" they!

Oh come on now. You were referring to liberals, no?

Okay, you got me! Wanna fight?

The politically sensitive deficit with China, whoever "they" are!

Edited February 11, 2009 by Mister_Bill

[one...two...tree 2,762]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

The "imperial" they!

Oh come on now. You were referring to liberals, no?

Okay, you got me! Wanna fight?

The politically sensitive deficit with China, whoever "they" are!

lol...I'm not looking for fight, but I enjoy a good argument and you made a statement that you should back up with substance. A high Trade Deficit was hurting our economy on certain aspects, but now that the Trade Deficit is down, it is adding to the worldwide Recession. There are no easy answers, but I'd say in the long run, we'll be better off if we can minimize the Trade Deficit, particularly with China.

[NickD 203]

Heard that on the news this morning, not that I cried, but really really need that economic stimulus program now to help China. Otherwise, China would have to move millions of people back to the countryside so they can enjoy the life they were accustomed to. And we can't have that.

[I AM NOT THAT GUY 5,715]

They are never happy. First the trade deficit is too large, and now it is too small. Well, I guess that means China will not be covering as much of our debts anymore. (Trade deficit is reconciled by the exchange of US dollars for US securities).

They who?

The "imperial" they!

Oh come on now. You were referring to liberals, no?

Okay, you got me! Wanna fight?

The politically sensitive deficit with China, whoever "they" are!

lol...I'm not looking for fight, but I enjoy a good argument and you made a statement that you should back up with substance. A high Trade Deficit was hurting our economy on certain aspects, but now that the Trade Deficit is down, it is adding to the worldwide Recession. There are no easy answers, but I'd say in the long run, we'll be better off if we can minimize the Trade Deficit, particularly with China.

So, you are not a happy guy anymore? My belief is that they need to remove all the controls and let the worldwide economy get back to equilibrium, the sooner the better. The collapse is going to happen anyways, so let's get it over with so that we can rebuild. I can survive that now, but not in ten or twenty years. Beyond that, it don't really matter, because I will be just as senile as the rest of them!

Edited February 11, 2009 by Mister_Bill

[w¡n9Nµ7 §£@¥€r 123]

He never said he's happy, he just said he's fancy.

[Jasman0717 9]

No one is spending any money

[I AM NOT THAT GUY 5,715]

No one is spending any money

Except at Walmart