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04-13-2006, 09:39 AM
Trade Deficit Narrows by 4.2%
As Imbalance With China Eases
Imbalance Will Be a Focus
Of Hu's Washington Visit;
Crude-Oil Pressures Mount
By GREG HITT
April 13, 2006; Page A2
WASHINGTON -- The U.S. trade deficit narrowed 4.2% in February to $65.74 billion as the closely watched imbalance with China eased and the volume of imported oil fell.
Total imports and exports both declined, as the February gap for trade in goods and services dropped $2.84 billion, from a revised $68.58 billion in January. U.S. exports in February totaled $112.98 billion, down $1.3 billion. Slackened demand for foreign-made goods pulled imports down $4.2 billion to $178.72 billion.
But even with the improvements, the monthly gap is still one of the largest ever, putting the U.S. on pace this year to break 2005's record annual trade deficit of $723.61 billion. "The trend still points to a larger deficit in coming months, especially given recent rises in oil prices," said Nigel Gault, U.S. economist for Global Insight Inc., a Massachusetts-based research and consulting firm.
Mr. Gault expects "trade will still be a drag on growth in the first quarter" of 2006, shaving an estimated 0.75 percentage point off growth in U.S. gross domestic product.
For the month, the average price of a barrel of crude rose to $53.72, up from $51.93 in January. But the volume of oil imports declined during the same period, bringing the overall value of crude imports down to $15.64 billion in February from $15.72 billion in January.
The U.S. deficit with China, which has been the source of Sino-U.S. trade friction, showed improvement in February as well, narrowing 23% to $13.84 billion. The drop reflected gains in U.S. exports to China -- which jumped $600 million on the strength of sales of cotton and soybeans -- and a $3.5 billion decline in U.S. imports from China, as demand for Chinese-made computers and household goods eased.
Although the deficit with China narrowed for the month, the gap showed no improvement over numbers posted in February 2005, when it stood at $13.87 billion. So far this year, the accumulated U.S. trade deficit with China is somewhat worse, totaling $31.75 billion, up $2.63 billion from the same period in 2005.
The mixed data come a week before a long-planned visit to the U.S. by Chinese President Hu Jintao. Trade issues are expected to dominate the visit, and President Bush has promised to raise concerns about China's currency management.
Critics complain that Beijing manipulates China's currency, keeping the value of the yuan artificially low to give Chinese companies an edge in the world market.
http://online.wsj.com/article/SB114484484383723904.html
As Imbalance With China Eases
Imbalance Will Be a Focus
Of Hu's Washington Visit;
Crude-Oil Pressures Mount
By GREG HITT
April 13, 2006; Page A2
WASHINGTON -- The U.S. trade deficit narrowed 4.2% in February to $65.74 billion as the closely watched imbalance with China eased and the volume of imported oil fell.
Total imports and exports both declined, as the February gap for trade in goods and services dropped $2.84 billion, from a revised $68.58 billion in January. U.S. exports in February totaled $112.98 billion, down $1.3 billion. Slackened demand for foreign-made goods pulled imports down $4.2 billion to $178.72 billion.
But even with the improvements, the monthly gap is still one of the largest ever, putting the U.S. on pace this year to break 2005's record annual trade deficit of $723.61 billion. "The trend still points to a larger deficit in coming months, especially given recent rises in oil prices," said Nigel Gault, U.S. economist for Global Insight Inc., a Massachusetts-based research and consulting firm.
Mr. Gault expects "trade will still be a drag on growth in the first quarter" of 2006, shaving an estimated 0.75 percentage point off growth in U.S. gross domestic product.
For the month, the average price of a barrel of crude rose to $53.72, up from $51.93 in January. But the volume of oil imports declined during the same period, bringing the overall value of crude imports down to $15.64 billion in February from $15.72 billion in January.
The U.S. deficit with China, which has been the source of Sino-U.S. trade friction, showed improvement in February as well, narrowing 23% to $13.84 billion. The drop reflected gains in U.S. exports to China -- which jumped $600 million on the strength of sales of cotton and soybeans -- and a $3.5 billion decline in U.S. imports from China, as demand for Chinese-made computers and household goods eased.
Although the deficit with China narrowed for the month, the gap showed no improvement over numbers posted in February 2005, when it stood at $13.87 billion. So far this year, the accumulated U.S. trade deficit with China is somewhat worse, totaling $31.75 billion, up $2.63 billion from the same period in 2005.
The mixed data come a week before a long-planned visit to the U.S. by Chinese President Hu Jintao. Trade issues are expected to dominate the visit, and President Bush has promised to raise concerns about China's currency management.
Critics complain that Beijing manipulates China's currency, keeping the value of the yuan artificially low to give Chinese companies an edge in the world market.
http://online.wsj.com/article/SB114484484383723904.html