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Current DateTime: 04:56:17 01 Dec 2009
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Farrell: What the Trade Deficit Numbers Mean
Published: Wednesday, 12 Aug 2009 | 10:50 AM ET
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Vince Farrell

Vince Farrell
CNBC Contributor

The trade deficit widened slightly to $27 billion from $26 billion last month. It was $65 billion just 11 months ago. Exports were up $2.4 billion to $125.8 billion and imports were also up by $3.5 billion to $152.8 billion (thus the deficit of $27 billion.)

The rise in imports was due almost exclusively to the price of imported oil. Non-petroleum imports fell 1%. Excluding petroleum, the trade deficit would have shrank from $12.7 billion to $9.8 billion. This figure was $23.4 billion one year ago.

The rise in exports—the second straight monthly increase—can be viewed as a positive comment on the beginning recovery in world trade. The fall in imports shows the continued caution being exercised by the American consumer.

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Vince Farrell
Vincent Farrell, Jr.
is chief investment officer at Soleil Securities Group and a regular contributor to CNBC. 


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