Post by hurricanemaxi on Dec 9, 2011 16:24:46 GMT -5
The trade deficit narrowed in October to the lowest level of the year, reflecting a drop in imports that will help give the U.S. economy a lift.
The gap shrank 1.6 percent to $43.5 billion, smaller than projected, from $44.2 billion in September, Commerce Department figures showed today in Washington. Purchases from overseas fell to the lowest level since April, due almost entirely to a plunge in demand for petroleum.
Imports of capital goods, like computers and aircraft, and consumer goods climbed, showing spending by American companies and households is keeping the economy growing. Exports to China and South and Central America reached records, indicating demand from developing nations that is benefiting companies like Dow Chemical Co. (DOW) may cushion the U.S. from any slowdown in Europe.
“We are seeing some resilience in U.S. demand,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who projected a gap of $43.6 billion. “Outside of Europe, demand is holding up in the face of this uncertainty. U.S. exports are going to remain in pretty good shape next year.”
Another report today showed confidence among consumers rose in December to a six-month high, more than forecast. The Thomson Reuters/University of Michigan preliminary sentiment index increased to 67.7 this month from 64.1 at the end of November. The gauge averaged 89 in the five years leading up to the recession that began in December 2007 and ended in June 2009.
Stocks rose after European leaders agreed to boost a rescue fund and tighten budget rules to stem the region’s debt crisis. The Standard & Poor’s 500 Index climbed 1.4 percent to 1,251.36 at 11:15 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.01 percent from 1.97 percent late yesterday.
Survey Results
The median forecast in a Bloomberg News survey of 80 economists projected the deficit to rise to $43.9 billion from a previously reported $43.1 billion in September. Estimates ranged from deficits of $40.3 billion to $46 billion. The government revised the September gap up to $44.2 billion.
Imports decreased 1 percent to $222.6 billion from $224.8 billion in the prior month. The value of crude oil purchases dropped to $26 billion, the lowest level since February, from $28.3 billion.
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The gap shrank 1.6 percent to $43.5 billion, smaller than projected, from $44.2 billion in September, Commerce Department figures showed today in Washington. Purchases from overseas fell to the lowest level since April, due almost entirely to a plunge in demand for petroleum.
Imports of capital goods, like computers and aircraft, and consumer goods climbed, showing spending by American companies and households is keeping the economy growing. Exports to China and South and Central America reached records, indicating demand from developing nations that is benefiting companies like Dow Chemical Co. (DOW) may cushion the U.S. from any slowdown in Europe.
“We are seeing some resilience in U.S. demand,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who projected a gap of $43.6 billion. “Outside of Europe, demand is holding up in the face of this uncertainty. U.S. exports are going to remain in pretty good shape next year.”
Another report today showed confidence among consumers rose in December to a six-month high, more than forecast. The Thomson Reuters/University of Michigan preliminary sentiment index increased to 67.7 this month from 64.1 at the end of November. The gauge averaged 89 in the five years leading up to the recession that began in December 2007 and ended in June 2009.
Stocks rose after European leaders agreed to boost a rescue fund and tighten budget rules to stem the region’s debt crisis. The Standard & Poor’s 500 Index climbed 1.4 percent to 1,251.36 at 11:15 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.01 percent from 1.97 percent late yesterday.
Survey Results
The median forecast in a Bloomberg News survey of 80 economists projected the deficit to rise to $43.9 billion from a previously reported $43.1 billion in September. Estimates ranged from deficits of $40.3 billion to $46 billion. The government revised the September gap up to $44.2 billion.
Imports decreased 1 percent to $222.6 billion from $224.8 billion in the prior month. The value of crude oil purchases dropped to $26 billion, the lowest level since February, from $28.3 billion.
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