Jun 10

WASHINGTON (AFP) – A surge in imports and skyrocketing oil prices pushed the US trade deficit in April to 60.9 billion dollars, government data showed Tuesday.

The monthly jump in the trade gap by 7.8 percent was the largest since September 2005 and was higher than economists’ estimates of 60 billion dollars.

The Commerce Department report showed a surge of 9.4 billion dollars in imports, including 5.4 billion dollars for oil and related products, outstripping the increase in exports of 5.0 billion dollars.

The politically sensitive trade deficit with China leapt 25.9 percent to 20.2 billion dollars, representing one-third of the overall gap.

The other big factor, petroleum, accounted for 34.5 billion dollars of the overall deficit. That was the second highest on record after the gap posted in January 2008. Continue reading »

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Apr 12

Today’s update on import prices once again paints a troubling picture on pricing pressures.

Import prices jumped 2.8% last month, the U.S. Labor Department reports. That’s the highest since last December’s unnerving 3.2% spike. More troubling is the fact that the 2.8% rise in March is in the upper range for monthly changes going back to the 1980s. Adding insult to injury, import prices soared 14.8% measured over the 12 months through last month, as our chart below shows. That’s the highest 12-month rate in the Labor Department’s archives, which goes back to 1982 as per the web site.

The “good news,” if we can call it that, is that much of the rise in import prices was due to higher energy costs. And energy prices can’t rise forever–we hope. In any case, the 14.8% surge in import prices over the past year falls to 5.4% after stripping out energy. But the lesser rise in non-petroleum import prices is hollow comfort once you recognize that the 5.4% annual pace is the highest since the 1980s. The basic trend, in short, is not in doubt, no matter how you slice the import-price pie.

How troubling is a 5.4% rise in non-petroleum imports? In search of an answer, consider that inflation generally in the U.S. is climbing by 4.0%, based on the annual rise in consumer prices through February. And the nominal (pre-inflation adjusted) annualized pace of economic expansion in 2007’s fourth quarter was 3.0%. In other words:

* non-petroleum import prices are advancing at a roughly 33% faster rate than general inflation
* non-petroleum import prices are rising 80% faster than the nominal growth of GDP Continue reading »

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Apr 06
Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest.

Saudi Arabia cut import taxes across a range of food products on Tuesday, slashing its wheat tariff from 25 per cent to zero and reducing tariffs on poultry, dairy produce and vegetable oils.

On Monday, India scrapped tariffs on edible oil and maize and banned exports of all rice except the high-value basmati variety, while Vietnam, the world’s third biggest rice exporter, said it would cut rice exports by 11 per cent this year.

The moves mark a rapid shift away from protecting farmers, who are generally the beneficiaries of food import tariffs, towards cushioning consumers from food shortages and rising prices. Continue reading »

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