Friday, March 11, 2005

She can move you and improve you
With her love and her devotion
And she'll thrill you and she'll chill you
But you're headed for commotion

And you'll need her so you'll feed her
With your endless dedication
And the quicker you get sicker
She'll remove your medication

Get the firehouse
'Cause she sets my soul afire
Get the firehouse
And the flames keep gettin' higher


Now, you may think I'm quoting these lyrics from the immortal Kiss song "Firehouse" (yes, I was in junior high in the 1970s) simply for pleasure, but I think they describe the US relationship with its erstwhile trading partners quite well -- particularly in light of the just-released US monthly trade figures for January.
The U.S. trade deficit climbed to $58.3 billion in January, the second-highest level in history, as Americans' appetite for foreign consumer products and automobiles hit record highs. The deficit with China was pushed higher by a surge in textile shipments, reflecting the end of global quotas.

The Commerce Department reported Friday that the January trade gap was 4.5 percent higher than December's $55.7 billion deficit and was just below the all-time high monthly deficit of $59.4 billion, recorded in November. . . .

As usual, the largest deficit with a single country was recorded with China, an imbalance of $15.3 billion, the third biggest imbalance on record and up 7 percent from December. The January deficit with China was driven by a 33.6 percent surge in shipments of textiles, which rose to $1.05 billion, reflecting the elimination of global quotas.
Over the last three months the US trade deficit is $173.4bn -- that makes for roughly an annualized $690bn.

Most disconcerting should be the rocketing non-petroleum goods balance, which leapt from -$42.8bn in December to -$46.0bn in January. Y-o-y non-petroleum goods imports are now up a whopping 18.2% while total US exports are up just 13.6%. January 2005 and November 2004 hold pride of place as the two largest non-petroleum trade deficit months, and with oil prices shooting through the roof again, we should expect monthly deficits well over $60bn as the spring progresses.

The East Asians sure have their work cut out for them, don't they?

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