US $ 678.7 billion in the US trade deficit in the crisis year … the highest since the financial crisis

0
44


The US trade deficit widened to its highest level in 12 years in 2020, as the COVID-19 pandemic disrupted flows of goods and services.
According to “Reuters”, the US Commerce Department said in a report yesterday, that the trade deficit jumped 17.7 percent to $ 678.7 billion last year, the highest since the 2008 financial crisis. Exports of goods and services fell 15.7 percent to their lowest level since 2010. Imports of goods and services fell 9.5 percent, to the lowest level in four years.
The report showed that exports of goods and services declined by about $ 400 billion to $ 2.1 trillion last year, while imports fell by just under $ 300 billion, to $ 2.8 trillion.
The decline in exports contributed to the economy shrinking 3.5 percent in the past year, the largest decline in gross domestic product since 1946. Trade flows are gradually improving.
For December, the trade deficit shrank 3.54 percent to 66.6 billion dollars.
Economists polled by “Reuters” had expected the deficit to shrink to $ 65.7 billion in December.
Goods imports rose 1.5 percent to $ 217.7 billion in December, while merchandise exports jumped 4.7 percent to $ 133.5 billion.
The total US trade deficit in 2020 increased by $ 102 billion from the previous year, with exports declining in light of the COVID-19 outbreak.
However, the US trade deficit with China in relation to goods registered a decline of 34.4 billion dollars to reach 310.8 billion dollars last year, with a slight improvement in exports and a slight decline in imports, according to the Ministry of Commerce.
According to the “French”, the closure of businesses and the disruption of shipping movement in the world due to Covid-19 were among the most important factors that characterized the trade scene for most of the year, which led to the largest trade gap since 2008 when the global financial crisis began.
However, as activity began to improve, the negative impact on exports and the service sector continued, while the easing of restrictions imposed by the United States to contain the epidemic led to a recovery in imports.
“Global demand remains weak and restrictions on travel will keep trade light in the near term, with total exports clearly lagging behind imports,” said James Watson of Oxford Economics.
In addition, US job growth rebounded less than expected in January, and jobs recorded more losses in the previous month than I initially thought, which strengthens the case for demanding more government relief funds to support the recovery from the Covid-19 pandemic.
According to “Reuters”, the US Labor Department said yesterday that the number of jobs in non-agricultural sectors increased by 49 thousand in the last month. Data for December has been revised to show a loss of 227,000 jobs, instead of 140,000 previously estimated.
The decline recorded in December is the first in eight months and comes amid renewed restrictions on activities such as restaurants to slow an increase in coronavirus infections.
The unemployment rate was 6.3% in January. But the rate is underestimated by people who wrongly classify themselves as “working but absent from work”.
The increase in jobs came in January after the world’s largest economic powerhouse saw a contraction in employment in December. However, the government indicated that the continued loss of jobs in sectors such as entertainment, hospitality, retail, health care and transportation undermines the gains that have been achieved, according to the “French”.
As for the decline in the unemployment rate, which reached 6.7 per cent in December, this trend has continued after it reached 14.7 per cent last April in the wake of lockdown measures aimed at curbing the spread of Covid-19.
It declined in the months that followed, but the January data contains worrying indications that the unemployment rate remains high.
The Ministry of Labor indicated that the total size of the workforce is 6.5 percent smaller, equivalent to 9.9 million jobs, a figure lower than it was in February last year before the epidemic.
William Springs, chief economist at the AFL-CIO Federation of Trade Unions, indicated that there has been a slight increase in the number of long-term unemployed, amounting to four million, equivalent to 39.5 percent of the total unemployed.
“This shows that it will be very difficult to reduce the number of unemployed. We need help now to reduce the pace of this rise,” he said on Twitter.
Congress approved the allocation of trillions of dollars to stimulate the economy since the outbreak of the epidemic, while President Joe Biden proposed a new package worth 1.9 trillion dollars.





LEAVE A REPLY

Please enter your comment!
Please enter your name here