Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  The trade deficit in goods and services increased to $48.8 billion in December
Posted Under: Data Watch • Trade
Supporting Image for Blog Post

Implications: Forget about trade for a second.  Yesterday it was reported that new claims for unemployment insurance dropped 15,000 last week to 358,000. The four-week average dropped to 366,000, the lowest since April 2008, well before the collapse of Lehman Brothers. Continuing claims increased 64,000 to 3.52 million, but the four-week average dropped to slightly below 3.5 million, the lowest since September 2008.  These figures show continued robust gains in payrolls for February. The trade deficit was about as expected for December, coming in near the middle of the range that it's been in since mid-2010.  Exports and imports rose in December. People are worried about problems in Europe affecting the USA's trade with that region, but both exports and imports rose in the Euro Area in December. In fact, the total volume of international trade (exports plus imports) hit a new all-time record high. Based on today's figures, trade's contribution to Q4 real GDP growth will be revised up slightly.  In 2012, the trade deficit is likely to be caught between two powerful opposing forces.  First, economic growth should accelerate, putting upward pressure on the trade gap.  But, second, the massive depreciation of the US dollar over the past decade should continue to make the US an attractive place from which to export.  That's why Japanese automakers are increasingly using the US as an export hub.  Companies like Caterpillar, Siemens, and Electrolux are noticing that unit labor costs are very low in the US, resulting in their bringing activity here that was previously done abroad.  Our best guess right now is that the trade deficit expands modestly in 2012.

Click here for a printable Version.
Posted on Friday, February 10, 2012 @ 9:52 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.