The US trade gap in February probably held at a six-year low as the worst global slump since World War II caused exports and imports to collapse, economists said ahead of a government report this week.
A deficit of US$36 billion, the same as in January, is the median estimate of economists surveyed by Bloomberg News before the Commerce Department’s report to be released on Thursday. Other figures the same day may show the cost of imported goods increased last month for the first time in eight months as fuel prices rebounded.
Flagging sales overseas will keep depressing US economic growth as manufacturers, already in a yearlong freefall, cut payrolls, output and inventories. The gloomy outlook prompted world leaders, meeting in London last week, to pledge more than US$1 trillion to stem the slump in world trade.
“The combination of a global recession and the global credit crunch are causing worldwide trade to dry up,” said Jay Bryson, a global economist at Wachovia Corp in Charlotte, North Carolina. “The worst part for the trade deficit will be here in the first half of the year.”
While consumer spending has shown signs of stabilizing this year after plunging in the last six months of last year, the improvements may not be enough to lead to a pickup in import purchases, economists said.
Any gain would probably be caused by the rebound in fuel costs.
The price of crude oil on the New York Mercantile Exchange averaged US$48.11 a barrel last month, up from US$39.26 the month before.
Rising oil probably contributed to a projected 0.9 percent gain in the cost of imported goods, the first increase since July, according to the survey median ahead of a Labor Department report on Thursday.
Forecasts are calling for a decline in global trade, sapping overseas demand for US-made goods. The World Bank last month projected trade will fall 6.1 percent worldwide. Earlier last month the WTO predicted a 9 percent drop.
Another report from Commerce this week is likely to show inventories at US wholesalers fell in February for a sixth straight month, indicating companies may trim orders going into the second quarter.
Weak sales are contributing to job cuts as firms rein in labor costs to weather the recession, now in its second year. Employers cut 663,000 workers from payrolls last month and the unemployment rate surged to 8.5 percent, the highest level in more than a quarter century, the Labor Department reported last week.
FedEx Corp, the second-largest US package-shipping company, said last week it is eliminating 1,000 jobs as part of a plan to save US$1 billion as sales drop.
The “global economic reality” made the job cuts “unavoidable,” Maury Lane, a FedEx spokesman, said in a telephone interview on Friday.