TRADE: Falling Deeper Into the Gap

Falling Deeper Into the Gap

It was a disturbing deterioration of an already dismal situation. The Federal Government revealed that the U.S. trade deficit widened for the fourth month in a row, reaching a record $16.5 billion in July. Moreover, the figures contained a new reason for concern. In previous months the main problem was caused by rising imports, while the export performance was improving. In July, however, imports increased 2%, but exports drooped 5%. The widening trade deficit is confounding economists because they expected it to shrink as a result of the dollar's two-year, 40% decline. Yet the stock market, possibly buoyed by news that...

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