By: Mike Campbell
The US trade deficit has long been a source of worry to legislators in the world’s largest economy. Data just released for November will have given them further reason for angst. The fledgling US recovery has stimulated demand for exported goods within the American economy at a time when US exports are still weak. The imbalance has led to a significant widening of the trade gap, by almost 10% in November, to over $36bn. US exports in November rose by 0.9% (total $174bn) over the figure for October, but this was eclipsed by the rise in imports; up 2.6% (total $138bn). On the positive side, the US trade deficit with China fell by $2.5bn to $20.2bn because a weaker Dollar boosted exports to the Chinese market. Trade volumes were up, in general, which supports the idea that a recovery in the US economy is actually underway.
2009 Turns Out To Be A Bumper Year For The Federal Reserve
Into every life a little rain must fall. The global financial crisis probably represents a downpour of monsoonal proportions for the US Federal Reserve which has been behind US stimulus packages to stave off financial meltdown and keep the US and global economy (much of which is centred in the US) on track. The Federal Reserve was able to charge banking and interest fees for the services it offered to stricken sectors of the economy such as the major automobile manufacturers (GM and Chrysler); mortgage providers Fannie Mae and Freddie Mac and mainstays of the US financial system such as AIG. As a result of these activities, the Fed balance sheet showed a healthy $2tn Dollars. The Fed repays the Treasury Department for any profits that it generates and has returned over $46bn this year – the greatest amount in its 96 year history.