Commentary on globalization, international business and its impact on market societies.
Thursday, March 10, 2011
U.S. International Trade Deficit Increases in January 2011
The US Census Bureau just released its trade statistics for January 2011. According to the Census Bureau, our Nation's international trade deficit in goods and services increased to $46.3 billion in January 2011 from $40.3 billion (revised) in December 2010, as imports increased more than exports. Exports increased to $167.7 billion in January from $163.3 billion in December. Imports increased to $214.1 billion in January from $203.6 billion in December. Find the full release at the Census Bureau website or download the PDF directly here.
The result is a net $6 billion trade deficit in one month! This is nearly a 15 percent in January as strong demand for imports reflected economic growth but raised concerns that American exports -- despite a record-setting month -- were not keeping pace. America's trade deficit with China accounted for about half the overall shortfall, rising to $23.3 billion in January 2011 up from $20.7 billion in December 2010. Analysts at Capital Economics states that, "To the extent that this surge reflects the strength of domestic demand...it isn't necessarily a disaster, nevertheless, it is a concern."
Increased exports contribute to job growth in the U.S., which is critical if we are to truly emerge from this economic recession. But, this unexpected surge in our deficit will continue to drag down real GDP growth as well.
The American consumer needs to rethink their strategy of buying up cheaper imported goods when US-made goods are available. But the real issue for consumers may be in their trying to find those equivalent US-made goods. When was the last time you saw an item, any time, at Wal-Mart that had a made in USA label on it? We all understand that consumer want the option to buy cheaper imported goods, but what about those of us who don't mind spending a little more for a US-made product? Where can we shop?