The U.S. trade deficit decreased in September as exports rose and imports fell, a sign that U.S. economy is strengthening despite the global meltdown.
Exports comprise about one-eighth of U.S. economic output and were instrumental in the recovery from the 2008 recession. The international trade deficit, the amount by which a country’s import costs exceeds that of its export costs, in goods and services fell to $40.8 billion down $7.2 billion from $48.0 billion in August, revised.
While the total export increased around $3.0 billion in September up from $184.9 billion in August, the import decreased around $4.3 billion.
The goods deficit with European Union decreased while that with China and Mexico increased. The plunge is an optimistic sign since Germany, U.K. and France feature in the top ten countries with whom U.S. has international trade relations.
The September report released by the census department says that export of goods increased $2.8 billion including export of consumer goods like artwork, antiques, stamps and jewelry. But the import of goods decreased $4.3 billion and the most badly hit sectors include crude oil and nuclear fuel materials. Caterpillar Inc., world’s largest construction and mining equipment maker, has announced that it would lay off 10,000 workers by the end of next year. The company said that it faced stiff competition due to the strong U.S. dollar and the plummeting oil prices around the world.
While some of the states like New York, California, Georgia, District of Columbia and Massachusetts showed an increase in export of goods through August and September; Texas, South Carolina, Michigan, Wisconsin and Tennessee showed a decrease during the same period.
U.S. has taken a long time to recover from the recession of 2008, and its impact could be felt in the job market for a long time. But the latest job report, which came out on Friday, shows a robust growth in non-farm payroll which shows that the country has come out of the recovery phase and is strengthening.
There is a growing concern about the global economy especially with the economic slowdown in China and the strengthening of dollar. The well being of the U.S. economy has an impact on the global economy and so it is important to know where the nation stands with respect to the world.