"Different is the good, and different, indeed, is the pleasant. These two, with different purposes, blind a man. Of these two, it is well for him who takes hold of the good; but he who chooses the pleasant, fails of his name." - Katha Upanishad II.2.1


























VEDANTA MASS MEDIAU.S. Economy: Trade Gap Narrows on Surge in Exports




             U.S. Economy: Trade Gap Narrows on Surge in Exports

             By Courtney Schlisserman


     Aug. 12 (Bloomberg) -- The U.S. trade deficit unexpectedly narrowed in June as the biggest jump in exports in more than four years overwhelmed record imports of petroleum.


     The gap shrank 4.1 percent to $56.8 billion from $59.2 billion in May, the Commerce Department said today in Washington. Shipments to Germany and the U.K. rose more than 4 percent, exports to Italy jumped 9.7 percent, and sales to Argentina and Brazil also climbed.


     Rising international demand is helping manufacturers like Caterpillar Inc. withstand a slowdown in U.S. sales, and today's figures may lead the government to lift its second-quarter economic growth estimate. The boost from trade may wane later this year as expansions in Europe and Japan stall.


     The balance of trade may continue to show some improvement, but I think export growth probably hit a peak,'' David Resler, chief U.S. economist at Nomura Securities International Inc. in New York, said in an interview with Bloomberg Radio.


     Economists had forecast the gap would widen to $62 billion from an initially reported $59.8 billion in May, according to the median of estimates in a Bloomberg News survey. Projections of the deficit ranged from $58 billion to $65.7 billion.


     A weaker dollar has helped stoke American exports. The currency has slumped 24 percent versus the euro in the past five years. It recouped some losses in the past four weeks as the outlook for Europe's economy dimmed. The dollar was little changed today at $1.4897 per euro at 11:13 a.m. in New York.




     Biggest Since 2004



     Exports increased 4 percent, the biggest percentage jump since February 2004, to $164.4 billion, led by record overseas sales of food, industrial supplies, capital goods and consumer goods.


     Imports rose 1.8 percent to $221.2 billion after increasing 0.3 percent in May. The import figures reflected a record $44.5 billion in purchases of foreign petroleum as well as record purchases of industrial supplies from overseas and increased demand for foreign-made autos and parts.


     A barrel of imported crude oil cost $117.13 in June, up from $106.28 the previous month.


     After eliminating the influence of price changes, the trade deficit narrowed to $39.1 billion, the lowest since December 2001, from $43.5 billion in May. Those numbers are used to calculate gross domestic product.



     Averting Contraction



     The Commerce Department last month estimated the economy expanded 1.9 percent in the second quarter, with the biggest contribution from trade since 1980 averting a contraction.


     ``We're in the sweet spot for deficit reduction,'' said Robert Stein, senior economist at First Trust Advisors in Lisle, Illinois, who forecast a June gap of $60 billion. He said today's figures may add as much as 0.9 percentage point to second-quarter growth.


     Excluding the effect of prices, non-petroleum imports declined during June.


     The U.S. trade deficits with Canada, Japan and the European Union widened. The gap with Mexico shrank as exports to that country reached a record.


     The gap with China was $21.4 billion, compared with $21 billion in May.


     Some U.S. lawmakers accuse China of keeping its currency undervalued to boost exports. Treasury Secretary Henry Paulson, writing this month on the Web site of Foreign Affairs magazine, said yuan strengthening still has ``much further to go.'' Of the advance since a fixed-exchange rate ended in July 2005, Paulson said 70 percent has come about after he initiated semiannual economic talks with China in 2006.



     OPEC Gap



     The deficit with the Organization of Petroleum Exporting Countries expanded by $200 million to a record $18.1 billion.


     U.S. manufacturers have received a boost from export orders as economies overseas grew and the dollar weakened.


     Caterpillar, the world's largest maker of earthmoving equipment, said July 22 that second-quarter profit climbed 34 percent, helped by demand in China and the Middle East. Developing markets this year may grow more than six times as fast as in North America, where the U.S. may find it hard ``to avoid a recession,'' Chief Executive Officer Jim Owens said in a statement.



     Deere Earnings



     Moline, Illinois-based Deere & Co., the world's largest maker of tractors and combines, is scheduled to report third- quarter results tomorrow and analysts surveyed by Bloomberg News forecast net income rose to $587 million from $537 million a year earlier.


     Deere CEO Robert Lane is counting on orders for tractors in North America, as well as in Brazil and Russia, to counter declining revenue from construction and forestry machinery amid the U.S. housing slump.


     As economic growth in Japan, Germany and other major trading partners weakens and the dollar rebounds, the outlook for exports has softened. The trade-weighted dollar index yesterday rose to the highest level since February.


     ``We continue to see global growth, perhaps not at the same rate, but it will continue to be solid,'' Commerce Secretary Carlos Gutierrez said in an interview with Bloomberg Television.


     Harvard University economist Martin Feldstein, a member of the committee that charts the American business cycles, said yesterday the U.S. dollar is cushioning the slowing in the economy and the currency has further to fall.


     ``Market pressures over time are going to put downward pressure on the dollar,'' Feldstein, who retired in June as president of the National Bureau of Economic Research, said in a Bloomberg Radio interview. ``A more competitive dollar has been the driving force in keeping'' gross domestic product expanding.


     The Institute for Supply Management's index of new export orders for manufacturers fell last month to the lowest level this year.






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International Yoga Day 21 June 2015
International Yoga Day 21 June 2015





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