QUOTE
Trade deficit surges, jobless claims remain high
By CHRISTOPHER S. RUGABER, AP Business Writer Thu Sep 11, 4:15 PM ET
WASHINGTON - The U.S. trade gap has hit a 16-month high, the job market is shrinking and exports — a rare item in the economy's plus column lately — may slow.
They are signs that the economy may be deteriorating further, analysts and business leaders said Thursday, which could intensify the political debate on how to fix the problems less than 60 days before Americans choose a new president.
The U.S. trade deficit soared in July, the Commerce Department said, as oil imports hit an all-time high. While exports increased, economists expect slowing economies in Europe and Asia will reduce export growth later this year.
The Labor Department also reported that new applications for unemployment benefits fell less than expected last week as the struggling economy continues to take a toll on workers.
And in a sign the job market could get worse, nearly one-third of the country's top executives expect to cut payrolls in the coming months, according to a survey released Thursday by the Business Roundtable, an association of large company CEOs.
Economists welcomed the continued strength in exports, which have been the primary driver of the U.S. economy in a year when the country has been battered by a prolonged slump in housing, rising unemployment and a severe credit crunch.
"There is no question that exports are driving our economy," said Commerce Secretary Carlos Gutierrez in an interview.
But David Resler, chief economist at Nomura Securities, said in a note to clients that export growth "underscores a new vulnerability" for the economy as overseas growth "appears to be slowing abruptly."
Many analysts expect rising unemployment to further crimp consumer spending and slow growth enough to cause the economy to contract in the fourth quarter and first quarter — the classic definition of a recession. The waning effects of the government's $168 billion stimulus package are expected to exacerbate the problem.
That could come just as the new president, either Republican candidate John McCain or his Democratic rival Barack Obama, is settling into the White House.
linkBy CHRISTOPHER S. RUGABER, AP Business Writer Thu Sep 11, 4:15 PM ET
WASHINGTON - The U.S. trade gap has hit a 16-month high, the job market is shrinking and exports — a rare item in the economy's plus column lately — may slow.
They are signs that the economy may be deteriorating further, analysts and business leaders said Thursday, which could intensify the political debate on how to fix the problems less than 60 days before Americans choose a new president.
The U.S. trade deficit soared in July, the Commerce Department said, as oil imports hit an all-time high. While exports increased, economists expect slowing economies in Europe and Asia will reduce export growth later this year.
The Labor Department also reported that new applications for unemployment benefits fell less than expected last week as the struggling economy continues to take a toll on workers.
And in a sign the job market could get worse, nearly one-third of the country's top executives expect to cut payrolls in the coming months, according to a survey released Thursday by the Business Roundtable, an association of large company CEOs.
Economists welcomed the continued strength in exports, which have been the primary driver of the U.S. economy in a year when the country has been battered by a prolonged slump in housing, rising unemployment and a severe credit crunch.
"There is no question that exports are driving our economy," said Commerce Secretary Carlos Gutierrez in an interview.
But David Resler, chief economist at Nomura Securities, said in a note to clients that export growth "underscores a new vulnerability" for the economy as overseas growth "appears to be slowing abruptly."
Many analysts expect rising unemployment to further crimp consumer spending and slow growth enough to cause the economy to contract in the fourth quarter and first quarter — the classic definition of a recession. The waning effects of the government's $168 billion stimulus package are expected to exacerbate the problem.
That could come just as the new president, either Republican candidate John McCain or his Democratic rival Barack Obama, is settling into the White House.
what's sadder is President Obama will be blamed.
