Feb trade deficit narrows to $65.7 bln

[Bush_Eats_Beef]

10 minutes ago

WASHINGTON (Reuters) - The U.S. trade deficit narrowed 4.1 percent in February to $65.7 billion, as imports fell by the largest amount in nearly a year and the bilateral trade gap with China shrank 22.7 percent, the Commerce Department said on Wednesday.

Wall Street analysts had expected weak consumer demand and softer oil prices to trim the monthly trade gap by only $1 billion, from the record set in January. The Commerce Department revised January's shortfall slightly higher to $68.6 billion.

The February trade gap was still the third highest on record, suggesting the annual trade deficit could surpass last year's record of $723.6 billion unless it begins shrinking much more rapidly in the coming months.

U.S. imports fell 2.3 percent in February to $178.7 billion, the largest month-to-month decline since March 2005, but still the second highest on record after January. Many analysts had expected imports to retreat after surging in the first month of 2006. The politically sensitive trade deficit with China narrowed significantly in February to $13.8 billion, the lowest level since March 2005.

http://news.yahoo.com/s/nm/20060412/bs_nm/economy_trade_dc_3

[gratuitous]

1. Great news! Uh, well, ehhhh, not so much

The headline giveth, the story taketh away. Yes, our trade deficit "narrowed" to $65.7 billion in February, but that's still the third highest trade deficit on record. And total imports for the month were the second highest ever. You wonder if February was a few days longer (like January) if the "narrowing" wouldn't have been illusory.

I have to say, though, that my first thought on seeing the headline was "Well, we're finally running out of money to buy other countries' goods."

[joefree1]

3. China needs to loan us more money

So we can buy more China made stuff. Hope they don't cancel our credit card. In fact we'll need credit with the coming war with Iran.

[enid602]

2. trade deficit

If the deficit with China shrank by 22%, you'd expect the allover deficit to go down by more than 4%. I suspect rising gas prices are the culprit.