Trade Deficit at All-Time High of $61.04B

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Trade Deficit at All-Time High of $61.04B

57 minutes ago

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - The U.S. trade deficit, aggravated by surging imports of oil and textiles, soared to an all-time high of $61.04 billion in February

The Commerce Department said Tuesday that the February imbalance was up 4.3 percent from a $58.5 billion trade gap in January as a small $50 million rise in U.S. exports of goods and services was swamped by a $2.58 billion increase in imports

Wall Street was jolted by February's record deficit, which was worse than had been expected. The Dow Jones industrial average was down 70 points in late-morning trading.

Trade deficits of this magnitude have raised worries among economists about America's ability to continue to attract the foreign financing needed to cover the shortfall between exports and imports. If foreigners decided to hold fewer dollar-denominated investments such as stocks and bonds, it could trigger steep declines in U.S. stock prices and a sharp increase in interest rates.


Critics point to the soaring deficits as evidence that President Bush's free trade policies are not working and have instead contributed to the loss of 3 million American manufacturing jobs since 2000.
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1. duplicate topic

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