Jan-June 2010 Trade Deficit Reveals Disturbing Trends

The macroeconomic trends for the first half of this year As bad as the latest monthly U.S. trade figures looked at what first glance (for June, the latest month available) – and they looked terrible – the details are far worse. And they’re especially disturbing given America’s inescapable need to produce and manufacture its way out of a crisis caused by too much borrowing, consuming, and debt. (This critical need to produce seems to go completely unnoticed by the Obama administration, incidentally.)

The macroeconomic trends for the first half of this year are virtually all discouraging. As widely noted, the 18.84 percent rise in the overall trade deficit in June boosted that month’s trade gap to $49.90 billion. That’s the highest monthly level reported since November, 2008 – right after Lehman Brothers went bust and Great Recession began deepening with a vengeance. The June figure also pushed the overall deficit for 2010's first six months 44.81 percent higher than for the corresponding figure in 2009.

Significantly, oil was a major culprit, with the nation’s petroleum what deficit up 55.30 percent on a year-on-year basis through June. But the non-oil deficit grew 22.34 percent – and it is 1.3 times bigger than the oil deficit.