Thanos Posted February 10, 2006 Share Posted February 10, 2006 December trade gap caps record year Deficit is second largest on record as full-year deficit crosses $700 billion mark for first time. February 10, 2006: 10:42 AM EST NEW YORK (CNN/Money) - The nation's trade gap soared to record levels in 2005, as the December report on imports and exports showed the third largest monthly deficit, topping Wall Street expectations. The Commerce Department reported Friday that U.S. imports outstripped exports by $65.7 billion in December, up from the revised $64.7 billion in November. Economists surveyed by Briefing.com were forecasting the gap would rise to $64.8 billion for the month. The December report brought the full-year trade gap up to $725.8 billion, up 18 percent from the previous record of $617.6 billion set in 2004. The U.S. consumer's appetite for oil, imported cars and consumer goods produced overseas drove the trade gap to its record level. That gap works out to an average of $2,448 per U.S. resident, which is up from $2,103 per capita in 2004. If the trade gap continues to grow at that 18 percent level in 2006 and 2007, the gap will top $1 trillion by the end of next year. And an 18 percent growth rate is not out of the realm of possibility; the gap has seen an average 19 percent growth rate since 2002 and nearly 25 annual growth rate over the last decade. As recently as 1995 the trade gap was under the $100 billion mark, but it has set new records nine times in the last 10 years. The rise in the gap came even as the nation's exports were strong in December. The report showed both a monthly and annual record. Exports grew by $2.3 billion $111.5 billion in the month, bringing the value of exports for the year to $1.3 trillion, a 10 percent gain. But imports grew even more, rising $3.3 billion to $177.2 billion for the month. For the year imports grew about 13 percent to just under $2 trillion. And the growth in the trade gap is almost certain to grow further, unless there is a sudden plunge in oil prices or a recession that caused a sharp drop in consumer purchases. Because imports now outpace exports by such a large amount, exports would have to grow at a pace 57 percent faster than import growth just to keep the trade gap unchanged. http://money.cnn.com/2006/02/10/news/economy/trade/index.htm?cnn=yes Link to comment Share on other sites More sharing options...
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