The United States trade deficit in September widened more than expected, to $36.5 billion, in part because of an increase in oil prices, the Commerce Department said Friday.þþThe department’s data showed an 18.2 percent jump in the gap between the value of imports and exports, known as the trade balance. þþBoth imports and exports rose, but an increase in the price of oil weighed significantly on the statistics. Oil prices increased to $68.17 a barrel in September from $64.75 in August. As a result, the United States imported $19.51 billion in oil in September, up from $17.38 billion in August.þþOverall, imports rose 5.8 percent in September to $168.4 billion from $159.1 billion, and exports grew 2.9 percent, to $132 billion from $128.3 billion — a significant increase that indicated higher demand for American products abroad, including autos, aircraft and industrial machinery. þþAs of September, the trade deficit is running at an annual rate of $366 billion, about half of last year’s $695.9 billion. The deficit with China, which had been easing, rose 9.2 percent to $22.1 billion last month.þþWhile the economy remains weak, Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Mass., said he saw reason for optimism in the numbers. The rise in imports, he said, indicated that manufacturers in the United States were building up inventories — a carmaker importing Japanese auto parts, for instance — in anticipation of higher demand from American consumers.þþ“It’s a very strong signal that the domestic economy is recovering,” he said.þþMr. Behravesh said he expected the appetite for imported goods would recede as the economy stabilizes, and that he believed exports would continue to climb.þþJosh Bivens, an economist at the Economic Policy Institute in Washington, said the large deficits with China were worrisome. China has made a habit of snapping up dollars in an effort to weaken its currency — the yuan — against the dollar. A cheap yuan makes Chinese goods overseas cheaper and increases their appeal to United States consumers.þþ“It’s bad for both countries,” Mr. Bivens said. “It’s money they could be spending somewhere else more valuably, in public infrastructure or public capital.”þþPresident Obama is in Asia this week, where he plans to tackle that very subject and make the case for weaning Asian economies off of demand from American consumers to balance the global economy.þþAs the dollar continues to drop against other major world currencies, companies in the United States are hoping to take advantage of its dwindling value.þþA weak dollar makes the price of foreign goods like French wine and Japanese cars more expensive in the United States, driving consumers toward American brands. Overseas, it makes United States exports like corn and mining trucks cheaper, helping sales for American companies.þþBut a bounce in exports may not come as quickly as some producers would like.þþJohn H. Dobson, president of the American Soybean Association, said he took the news of a weak dollar as a positive sign. þþ“I hope that we will be able to catch up and see strong export growth,” Mr. Dobson said. Exports of soybeans, as well as corn, fell slightly in September.þþHowever, he said the weak dollar meant soybean growers would have to pay more overseas for things like fertilizer and machine parts, and he worried that there was a limit to the demand for soybeans worldwide, even if they were cheaper to foreign consumers.þþDermot Hayes, a professor of economics and finance at Iowa State University who specializes agricultural economics, said the global malaise could slow what might otherwise be a positive for American exporters.þþ“If it weren’t for these other impediments in the crisis, we should have seen a big increase in exports,” he said. “But it also takes awhile to produce stuff. You have to ramp up production and grow more acres and grow more pigs and more cows and that takes time.”þþPolicy makers in Washington have seemed content to let the dollar slide, so long as it does not fall at such a rapid pace that it wreaks havoc on world economies. The Federal Reserve has kept its interest rates at historic lows, helping to contribute to a weak dollar as investors transfer their wealth to the world’s booming stock markets.þþIn Asia this week, Treasury Secretary Timothy F. Geithner reiterated his support for a strong dollar in the face of criticism from the finance ministers of other nations, who hold much of their foreign investments in United States dollars.þþIn August, the deficit narrowed unexpectedly as Americans cut back on foreign oil. On Friday, the Commerce Department revised the August deficit to $30.71 billion.þ
Source: NY Times
