Wednesday, 13 May 2009

US trade deficit widens, UK sees signs of stabilisation

The US trade deficit widened in March. Reuters reports:

The U.S. trade gap widened in March for the first time in eight months, as oil imports jumped and weak overseas demand took a bite out of exports.

The trade gap grew to $27.6 billion in March, the U.S. Commerce Department reported on Tuesday, after shrinking in each of the previous seven months and hitting its lowest level in nine years in February...

U.S. exports tumbled in March to $123.6 billion, after rising for one month in February. The March downturn resumed a trend dating back to July.

There is a positive side to the report.

However, in a sign the U.S. economy could be nearing a turnaround, imports declined at a slower rate, down 1 percent in March compared with a 5.1 percent drop in February and even bigger declines in some preceding months.

The deficit also was smaller than the U.S. government expected when it reported U.S. economic output contracted 6.1 percent in the first quarter.

"Taking account of all information presently available, it is likely that the Q1 GDP decline will be revised from 6.1 percent to 5.7 percent," said Nigel Gault, chief economist at IHS Global Insight.

Reports from the UK also offered some hope for improvement in its economy. Reuters reports:

Manufacturing output recorded its smallest monthly fall in more than a year in March, pointing to a possible end in prospect for the sector's contraction after the worst calendar quarter since records began.

Leading economic think-tank NIESR said there were signs the economy stabilised in April, which along with news of a jump in retail sales and a marked slowdown in house price falls, boosted hopes Britain may be starting to emerge from recession.

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