US trade deficit shrunk as domestic demand for foreign made goods declined while foreign demand for US products increased due to weaken US dollar.
The US trade deficit shrank more than expected in March 2008 to USD 58.2 billion. The trade gap narrowed from a revised USD 61.7 billion in February 2008. Most economists had predicted that the deficit would narrow to 61.3 billion.
The trade gap shrank 5.7% in March 2008, the Commerce Department reported on Friday, much smaller than expected, reports The Age.
The reason for this record drop in US imports is slowing domestic demand due to inflating US economy is directly supporting the US trade balance in March 2008 despite record high oil prices. Also imports dropped as Americans; due to weak US dollar did not show interest to buy foreign-made cars and trucks, consumer goods, industrial supplies and certain foods among other goods.
The tumbling down dollar value against other world currencies had made US-made goods much more affordable for rest of the world and helped to create a big demand for US product in the international market and made the trade balance to shrink the deficit.
Also US exports which set records in 12 consecutive months helped the US economy afloat during a time of mayhem due to housing slump and spreading liquidity crisis and made the trade deficit to shrank.
"The weaker dollar against the euro, pound and Canadian dollar is boosting exports," said Peter Morici, a business professor at the University of Maryland, reports AFP.
As per the research analyst at Arth Business Research, “With increasing oil prices and inflating US economy the domestic demand for foreign made products are expected remain low by crushing down slightly improving US dollar. Hence with slowing domestic demands and increasing exports is expected to narrow the US trade deficit further.”
The US trade deficit shrank more than expected in March 2008 to USD 58.2 billion. The trade gap narrowed from a revised USD 61.7 billion in February 2008. Most economists had predicted that the deficit would narrow to 61.3 billion.
The trade gap shrank 5.7% in March 2008, the Commerce Department reported on Friday, much smaller than expected, reports The Age.
The reason for this record drop in US imports is slowing domestic demand due to inflating US economy is directly supporting the US trade balance in March 2008 despite record high oil prices. Also imports dropped as Americans; due to weak US dollar did not show interest to buy foreign-made cars and trucks, consumer goods, industrial supplies and certain foods among other goods.
The tumbling down dollar value against other world currencies had made US-made goods much more affordable for rest of the world and helped to create a big demand for US product in the international market and made the trade balance to shrink the deficit.
Also US exports which set records in 12 consecutive months helped the US economy afloat during a time of mayhem due to housing slump and spreading liquidity crisis and made the trade deficit to shrank.
"The weaker dollar against the euro, pound and Canadian dollar is boosting exports," said Peter Morici, a business professor at the University of Maryland, reports AFP.
As per the research analyst at Arth Business Research, “With increasing oil prices and inflating US economy the domestic demand for foreign made products are expected remain low by crushing down slightly improving US dollar. Hence with slowing domestic demands and increasing exports is expected to narrow the US trade deficit further.”
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