2004 Trade Deficit Sets Record, $617 Billion
Thursday, February 17, 2005 at 02:49AM
TheSpook
The American trade deficit broke the $600 billion barrier in 2004,
soaring to $617.7 billion, the Commerce Department reported on
Thursday, but the gap narrowed in December in part because sharply
lower oil prices cut the cost of energy imports. The deficit now
accounts for more than 5 percent of the American economy, a level that
adds further pressure to forces pushing down the value of the dollar
and increases the amount of debt held overseas. For December, the gap
between American exports and imports of goods and services fell 4.9
percent, to $56.4 billion, down from a revised deficit of $59.3 billion
in November. The November deficit was originally reported at $60.3
billion. Domestic manufacturers, labor unions and many Democrats say
the huge trade deficit reflects the erosion of the American
manufacturing base and a concurrent loss of jobs. The annual report
showed that the United States lost ground last year, not only in
manufacturing but also in advanced technology products and services,
two of the country's strongest sectors. The deficit in technology
products grew to $37 billion last year while the surplus for services,
including banking, insurance and investment, shrank to $48.5 billion,
the lowest since 1991. The Bush administration, by contrast, views the
deficit through a different lens. Treasury Secretary John W. Snow said
through a spokesman that the report showed that the American economy
was growing faster than the economies of other advanced industrial
nations. The imbalance, he said, reflects the ability of American
consumers to buy more imports. [more]
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