The Commerce Department reported the April deficit on international trade in goods and services increased to $43.7 billion up from $27.1 billion in when the economic recovery began.
The trade deficit, along with the credit and housing bubbles, were the principal causes of the Great Recession. A rising trade deficit again threatens to sink the recovery and push unemployment above 10 percent.
Most fundamentally, U.S. economic growth and jobs creation has slowed, because the demand for U.S. made goods and services is expanding too slowly. Supplying what Americans and global consumers buy is not the issue, but rather U.S. and export customers don't want enough of what Americans could make.
At 3.5 percent of GDP, the trade deficit subtracts more from the demand for U.S.-made goods and services than President Obama's stimulus package added. The Obama stimulus was temporary and now dissipating, whereas the trade deficit is permanent and swollen again.
The high cost of imported oil and gasoline and subsidized manufactures from China account for nearly the entire deficit. During the recovery, both the cost of imported oil and Chinese imports have risen with consumer spending, and now these threaten to sink the recovery by year end.
Money spent on Middle East oil and Chinese coffee makers cannot be spent on U.S.-made goods and services, unless offset by exports.
When imports substantially exceed exports, Americans must consume much more than the incomes they earn producing goods and services, or the demand for what they make is inadequate to clear the shelves, inventories pile up, layoffs result, and the economy goes into recession.