Trade Deficit Falls with Increased Demand for U.S. Goods

With the U.S. dollar failing, demand for American goods is on the rise and exports were at their highest level since August 2008 as of October. Exports rose 3.2 percent to $158.7 billion with purchases of American-made machinery, farm products and cars leading the way and the U.S. trade deficit fell to $38.7 billion, 13.2 percent below the deficit in September ($44.6 billion). The rise in exports is expected to boost economic growth in U.S. export markets and help with the Obama administration’s goal of doubling U.S. exports to combat high unemployment rates. However, the trade deficit with China continues to grow as China keeps the Yuan considerably undervalued against the dollar. This unfair trade practice, as critics call it, is making it cheap to buy Chinese products meanwhile increasing the price of U.S. goods in China. Overall, the U.S. trade deficit is at an annual rate of $504.8 billion up from $374.9 billion dollars in 2009, but economists expected the increase would happen as U.S. economy recovered. It is their hope that with a decline in the dollar, global demand for U.S. goods will make exports competitive and offset some of the increase in imports.