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Rising Exports Putting Dent in Trade Gap
By JEREMY W. PETERS
Published: May 14, 2007
Over half of the 9.1 million vehicles General Motors produced last year were sold in foreign countries. More KFC fast food restaurants are opening in China now than in the United States.
With the slumping housing market taking a toll on its business at home, Caterpillar is counting on sales of equipment and diesel engines in Europe, Asia and the Middle East to keep growing.
American companies have been doing business abroad for a long time, but never before has it been so important. This year, for the first time, Standard & Poorâs expects the 500 companies in its benchmark stock index to generate more than half of their sales in foreign countries.
Even as companies in the United States are gaining ground overseas, they are also sending more American-made products abroad. A weaker dollar is adding to their good fortunes, helping to make American goods and services more competitive in foreign markets.
As a result, it now looks as if the huge trade deficit, which swelled to a record $765.3 billion last year, could gradually decrease. The trade gap widened in March, mostly because of higher prices for imported oil, but the vast disparity between what Americans import and export is expected to narrow, which would allow trade to contribute to economic growth in the United States for the first time in more than a decade.
The shift to a more export-driven economy, if it continues, could add more jobs at home and help the United States bounce back from its slowest economic expansion in four years.
When the trade deficit shrinks, âhome-grown demand is being fed by home-grown production instead of foreign production,â said Chris Varvares, the president of Macroeconomic Advisers, an economic research firm in St. Louis. âThat requires more domestic employment, and thatâs better for the domestic economy.â
Faster growth in Europe and Asia is helping to cushion the blow of a collapsing housing boom that has hampered domestic consumer spending, creating more demand from elsewhere for goods and services made in the United States.... (more)
http://www.nytimes.com/2007/05/14/bu...dollar.html?hp
By JEREMY W. PETERS
Published: May 14, 2007
Over half of the 9.1 million vehicles General Motors produced last year were sold in foreign countries. More KFC fast food restaurants are opening in China now than in the United States.
With the slumping housing market taking a toll on its business at home, Caterpillar is counting on sales of equipment and diesel engines in Europe, Asia and the Middle East to keep growing.
American companies have been doing business abroad for a long time, but never before has it been so important. This year, for the first time, Standard & Poorâs expects the 500 companies in its benchmark stock index to generate more than half of their sales in foreign countries.
Even as companies in the United States are gaining ground overseas, they are also sending more American-made products abroad. A weaker dollar is adding to their good fortunes, helping to make American goods and services more competitive in foreign markets.
As a result, it now looks as if the huge trade deficit, which swelled to a record $765.3 billion last year, could gradually decrease. The trade gap widened in March, mostly because of higher prices for imported oil, but the vast disparity between what Americans import and export is expected to narrow, which would allow trade to contribute to economic growth in the United States for the first time in more than a decade.
The shift to a more export-driven economy, if it continues, could add more jobs at home and help the United States bounce back from its slowest economic expansion in four years.
When the trade deficit shrinks, âhome-grown demand is being fed by home-grown production instead of foreign production,â said Chris Varvares, the president of Macroeconomic Advisers, an economic research firm in St. Louis. âThat requires more domestic employment, and thatâs better for the domestic economy.â
Faster growth in Europe and Asia is helping to cushion the blow of a collapsing housing boom that has hampered domestic consumer spending, creating more demand from elsewhere for goods and services made in the United States.... (more)
http://www.nytimes.com/2007/05/14/bu...dollar.html?hp