Second month of increase in trade deficit raises new worries for US economy

(AP) - The U.S. trade deficit unexpectedly increased for a second straight month in February, raising concerns that the economy's one standout performer could be starting to flag.

The Commerce Department reported Thursday that the deficit between what the U.S. imports and what it sells abroad rose 5.7 percent to $63.2 billion (€39.81 billion) in February, the highest level since November.

Imports of goods and services shot up 3.1 percent to an all-time high of $213.7 billion (€134.61 billion), reflecting a big surge in imports of foreign cars. Exports also set a record, rising by 2 percent to $151.4 billion (€95.37 billion), reflecting strong gains in the sale of American-made heavy machinery, computers and farm goods.

Critics claimed that the sharp rise in the trade deficit showed the continued failure of President George W. Bush's policies emphasizing negotiating free trade agreements as a way to promote U.S. jobs by boosting exports.

With businesses cutting 80,000 jobs last month, the most in five years, and the country likely in a recession, the debate over trade is expected to intensify in this election year. Republicans contend Bush's policies reflect the reality of the new global economy, while Democrats argue that Bush has contributed to the loss of more than 3 million manufacturing jobs since he took office.

"Wages are falling and the middle class is shrinking because of trade deficits," James Hoffa, president of the International Brotherhood of Teamsters, said Thursday at the end of a three-day convoy across Pennsylvania aimed at highlighting the failings of Bush's trade policies.

Trade is shaping up as a key issue in the presidential campaign and in the fight for control of Congress. In an early showdown, the Democratic-led House voted 224-195 on Thursday to reject Bush's effort to force Congress to vote within the next 90 legislative days on a free trade agreement with Colombia.

The administration charged that Democrats were forsaking a key South American ally while Democrats said Colombia needed to do more to halt the violence against union organizers before they would consider the trade pact. The vote also calls into question pending free trade deals with South Korea and Panama.

In other economic news, the number of newly laid off workers filing claims for unemployment benefits fell sharply last week after having hit the highest level in more than two years in the previous week. The Labor Department said applications for jobless benefits totaled 357,000 last week, down by 53,000 from the previous week. Economists said the wide swings reflected in part the trouble the government is having in seasonally adjusting the figures.

Meanwhile, U.S. retailers reported mixed results in March. Wal-Mart and Costco Wholesale Corp. were among the best performers. Other retailers said their sales suffered from the weak economy and an early Easter that dampened clothing sales.

On Wall Street, investors were encouraged by the big drop in weekly applications for jobless benefits and the better-than-expected performance for some big retailers. The Dow Jones industrial average rose 54.72 points to close at 12,581.98.

For the first two months of this year, the trade deficit is running at an annual rate of $727.6 billion (€458.33 billion). Last year, the deficit declined to $708.5 billion for the entire year, fueled by a boom in exports. It marked the first decline in the trade deficit after five straight years of records.

With the economy battered by a prolonged slump in housing and a severe credit crunch, trade has been one of the few sources of strength. However, analysts said based on the rising deficit in the first two months, trade will likely provide less of a boost in the first three months of this year, making it more likely that the overall gross domestic product turned negative.

Brian Bethune, chief U.S. financial economist for Global Insight, said he expected GDP would decline at an annual rate of 0.1 percent to 0.2 percent in the first quarter. The classic definition of a recession is two consecutive quarters of declining GDP.

Bethune said the big jump in auto imports in February may be reflecting a move by American consumers toward more fuel-efficient foreign cars, which would be another blow for struggling U.S. automakers.

Many analysts believe the two-month jump in the deficit will be reversed in coming months because they think a recession in the United States will cut into demand for foreign goods as well as U.S.-made products.

For April, the politically sensitive deficit with China dropped by 9.6 percent to $18.4 billion (€11.59 billion), the lowest imbalance in a year. The improvement reflected big declines in imports of computers, cell phones and other telecommunications equipment as well as clothing. Even with the decline, the U.S. deficit with China remained the largest with any country. The next highest deficit was an imbalance of $6.9 billion (€4.35 billion) with Japan.

America's foreign oil bill fell 5.7 percent to $37.7 billion (€23.75 billion) in February, marking the first monthly decline in a year. It occurred even though the average price for imported crude oil hit a record of $84.76 (€53.39) in February. With crude oil prices hitting new records above $110 (€69.29) per barrel, analysts believe the petroleum bill will resume rising in coming months.

The deficit with the European Union rose to $6.9 billion (€4.35 billion) in February, up 13.5 percent from January, even though U.S. exports to Europe hit an all-time high, reflecting the fact that a decline in the dollar to record lows against the euro has boosted the price competitiveness of American products.

Georgia approves draft agreement with largest oil company in Eastern Europe
Georgia approves draft agreement with largest oil company in Eastern Europe
Kazakhstan decreases exports to Belarus year-on-year
Kazakhstan decreases exports to Belarus year-on-year
Head of parliamentary committee talks agricultural activity in liberated Azerbaijani lands
Head of parliamentary committee talks agricultural activity in liberated Azerbaijani lands
Loading Bars
Global COVID-19 deaths surpass 2.5 mln - Johns Hopkins University
Georgia approves draft agreement with largest oil company in Eastern Europe
Kazakhstan decreases exports to Belarus year-on-year
UAE resumes issuing travel visa for Iranians
Head of parliamentary committee talks agricultural activity in liberated Azerbaijani lands
AZAL to start to make special flights from Baku to Kyiv
OSCE PA Vice-President names Azerbaijan's challenges in post-Karabakh conflict period
Khojaly genocide - criminal act committed against mankind, against humanity, MP says
Azerbaijani FM, Israeli ambassador discuss prospects for development of bilateral co-op (PHOTO)
Russian journalists horrified by Azerbaijani Aghdam city's destruction
Netherlands Trading House may open in Azerbaijan
Supplies of 'Iskander' missiles to Armenia must be stopped – Russian expert
Baku hosts meeting with Pakistani military delegation
Pakistani FWO talks interest to co-op with Azerbaijan in infrastructure projects
Azerbaijani president receives Signify representatives via video format (PHOTO)
OSCE MG should support post-conflict rehabilitation of Azerbaijani territories - OSCE PA VP
Chairperson-in-Office of OSCE looks to visit Azerbaijan
Italy's share in Azerbaijani oil export in 2020 disclosed
Azerbaijani satellites to provide HD broadcasting to West Africa region
Hungary-Azerbaijan cooperation on ACG, Baku-Tbilisi-Ceyhan pipeline can expand to new areas
Khazar Consortium opens again tender for service maintenance in Turkmenistan
Conversations ongoing on potential projects between Turkmenistan, UK
Uzbekistan’s fiscal policy to continue supporting economic recovery - Fitch Ratings
Payment card turnover in Azerbaijan continues to grow
Azerbaijan’s crude oil export to China up
Hungary eyes including Azerbaijani gas in country’s future energy mix
Azerbaijani market of great interest to Russian Perm region's business circles
Azerbaijan reports 142 more COVID-19 recoveries
Azerbaijan discloses volume of foreign trade operations with Russia in Jan. 2021
Azerbaijan to use new 'cloud' technologies in audit during 2021 - Chamber of Auditors
Volume of loans issued by Georgian commercial banks down
Uzbek-Korean JSC announces tender for transport services
OSCE ready to deploy mediation missions for sustained peace in Azerbaijani liberated territories - president
CNPC in Turkmenistan opens tender for provision of gas leakage detection services
Fitch projects share of state-owned banks in Uzbekistan to reduce
"Sign of Khojaly" film demonstrated within "Justice for Khojaly" campaign (VIDEO)
OIC SecGen pays tribute to those who lost their lives in Khojaly genocide
Reconstruction of Azerbaijan’s liberated lands to deepen economic co-op with Hungary
Moderna sees $18.4 billion in sales from COVID-19 vaccine in 2021
Swiss agriculture technologies to be introduced in Kazakhstan's Almaty
Tesla short-sellers sitting on $3.5 billion weekly profits
Azerbaijani FM receives Pakistani FWO's Director General (PHOTO)
Resident of Azerbaijan's liberated Jabrayil district injured as result of mine explosion
Georgia creating new council to develop state enterprise reform strategy
Uzbekistan approves investment agreements on construction of wind farms in Bukhara region
Iran's raw steel exports shrink
Dutch company sets up concrete production plant in Uzbekistan’s Tashkent region
Georgian Railway to resume passenger transportation
Azerbaijan records growth of debit cards in January 2021
Azerbaijani company signs contracts for transportation of aluminum products to Turkey
Russia increasing supplies to Turkey along BTK railway
Main share of Czech investments in Georgia falls on energy sector
Oil refining volumes decrease in Kazakhstan year-on-year
Azerbaijan communications ministry working on stabilizing Internet in districts
Azerbaijan’s Azerishig, MERKABA-SOFT companies sign contract
Payments of Azerbaijani insurance companies double
Data on cotton yarn sales on Turkmenistan’s exchange in Jan.2021
Kazakhstan's national oil&gas company reports lower annual oil transportation volumes
Kazakhstan's KazMunayGas sees decrease in 2020 oil extraction
Azerbaijan sees Jan.2021 growth of national currency deposits in local banks
Georgia plans to hinder construction of plastics recycling plant in Kutaisi FIZ
Iran reveals COVID-19 data for February 25
AzTV will investigate historical assasinations (PHOTO)
Kazakhstan eyes to host meeting of Turkic Council countries' energy ministers in 2022
Zarif urges South Korea to release Iran's blocked assets
UK eager to restart U.S. talks on tariff removal
Saipem expects capex to rise in 2021
Central Bank of Azerbaijan announces winner of tender for survey on household plans
Central Bank of Azerbaijan shares data on revenues of Azerbaijani insurance companies
Number of trucks crossing through Iran's Jolfa border checkpoint revealed
German companies eye 'green economy' dev't projects in Kazakhstan
Kazakh investors interested in several sectors of Turkish economy
Assets of pawnshops and microcredit organizations in Uzbekistan increase
Kazakhstan's major copper company reveals its 2021 production guidance
Turkey's activity on Turkmenistan’s exchange in Jan.2021
Azerbaijani president takes part in ceremony of providing families of martyrs, disabled with apartments (PHOTO)
Details of import-export via Iran's Bushehr Province announced
President Ilham Aliyev attends opening of Shaghan Rehabilitation Pension (PHOTO)
KAZ Minerals provides update on Baimskaya Project in co-op with Russia
Military coup attempt in Armenia - PM inviting supporters to Republic Square
Uzbek agriculture ministry to create system to monitor irrigated lands
Pashinyan dismisses head of General Staff
Armenian General Staff demands Pashinyan's resignation
Azerbaijani banks' foreign currency demand down
Azerbaijan privatizes several district public properties via auctions
Turkmenistan prepares to host transport conference for landlocked developing countries
Bakcell launches internet package for online education and work
Iran starts exporting products from Tombak port
Georgian PM appoints Vice PMs
Extraction from Iran's South Pars gas field exceeds plan
Kazakhstan's KAZ Minerals reports increase in revenues
TOP-5 trading partners of Azerbaijan in Jan. 2021
Georgia to extend grace period for auto importers
Saipem’s capex down, net financial debt up in 2020
Kazakh national atomic company's subsidiary opens tender to repair vehicles
Saipem sees decrease in revenues due to slowdown of projects
Barclays lifts 2021 oil price outlook on tighter U.S. supply view
Azerbaijani MFA comments on statements by Luxembourg's FM
Khojaly genocide - heaviest crime of last century, says Turkish Parliament's chairman
Turkey records more revenue from Jan.2021 car exports to France
All news