Must be the worst economy in 50 years.

[MonsterMark]

Remember that 'ol famous Clinton line that helped get him elected?

It must be happening again.

I hope the economy continues to boom right up until the mid-term elections. People always vote with their pocketbooks.

And yes, we had a budget surplus of $20 billion in January.
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RETAIL SALES SURGE

WASHINGTON (Reuters) - U.S. retail sales surged 2.3 percent in January, nearly triple the expected increase and the largest gain since May 2004, as post-holiday spending on cars, clothing, gasoline and furniture galloped ahead, a government report showed on Tuesday.

Excluding demand for cars and parts, retail sales were up 2.2 percent last month - the largest monthly gain in more than six years, the U.S. Commerce Department said.

Both overall sales and sales outside the auto sector were far stronger than Wall Street had expected. Economists had forecast a 0.8 percent overall increase and a 0.7 percent gain excluding cars.

The higher-than-expected sales growth in January was offset slightly by a downward revision to December's data. Sales were up just 0.4 percent in December, rather than the initially reported 0.7 percent gain. The rise in sales outside the auto sector was unrevised at 0.2 percent in December.

Sales of motor vehicles and parts surged 2.9 percent in January, building on December's 1.2 percent gain, while sales at gasoline stations rocketed 5.5 percent higher. When both cars and gasoline are excluded, retail sales were up 1.8 percent in January, the largest increase since March 2004.

Demand was firm across nearly all major retail categories in January. Furniture sales rose 3.7 percent, electronic and appliance sales climbed 2.0 percent and building material and garden equipment sales surged 3.4 percent.

Sales of clothing advanced 4.2 percent, the largest gain since October 2002.

Business was also brisk at restaurants and bars, where sales were up 3.2 percent, though grocery store sales grew just 0.2 percent, the report showed.

Non-store retailers - including electronic shopping and mail-order - were the only major category with declining sales, down 2.6 percent, the biggest drop since September 2001

 

[JohnnyBz00LS]

America’s trade deficit hits all-time high

America’s trade deficit hits all-time high
Imports continue to soar as U.S. manufacturing contracts
American consumers continued their love affair with all things foreign, pushing imports of cars, foreign food products and other consumer goods to all-time highs in 2005.

Ric Francis / AP

Updated: 2:36 p.m. ET Feb. 10, 2006
WASHINGTON - The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. The deficit with China hit an all-time high as did America’s deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America.

The Commerce Department reported Friday that the gap between what America sells abroad and what it imports rose to $725.8 billion last year, up by 17.5 percent from the previous record of $617.6 billion set in 2004.

It marked the fourth consecutive year that America’s trade deficit has set a record and was certain to spark increased debate in Congress over President Bush’s trade policies. Since mid-2000 the country has lost nearly 3 million manufacturing jobs and Democrats blame the administration’s policy of emphasizing free trade agreements.

Last year’s deficit reflected the fact that imports rose by 12.9 percent last year to an all-time high of $2 trillion, swamping a 5.7 percent increase in exports, which were up 5.7 percent to a record high of $1.27 trillion.

For December, the trade deficit edged up a slight 1.5 percent to $65.7 billion, the third highest monthly figure on record.

Bush, in an effort to counter the growing anxiety over America’s ability to compete with such rising economic powers as China and India, unveiled a new American Competitiveness Agenda in his State of the Union address to double government spending on basic research, extend tax breaks for company spending on research and hire thousands of new math and science teachers for the nation’s high schools.

But critics contend that the trade deficit will keep growing unless the administration takes a harder line against unfair trade practices in low-wage countries such as China, a country they contend has gained a huge advantage over America by artifically depressing the value of its currency, which makes Chinese goods cheaper for American consumers and American products more expensive in China.

The U.S. trade deficit with China rose to a record $201.6 billion last year, the highest deficit ever recorded with any country and 24.5 percent above the previous record of $161.9 billion set in 2004. Part of that increase reflected a 42.6 percent increase in imports of Chinese clothing and textiles, which soared at the beginning of the year after the removal of global quotas.

American manufacturers, arguing that the U.S. textile and clothing industries were losing thousands of jobs, got the administration to negotiate a three-year agreement with China to reimpose quotas in a number of categories.

The United States also recorded record deficits with Japan at $82.7 billion. Until it was surpassed by China in 2000, Japan was the country that had the largest trade gap each year with the United States.

America’s trade deficit set records with much of the rest of the world as well. Among those records was a $122.4 billion gap with the 25-nation European Union, a $92.7 billion deficit with the nations that belong to the Organization of Petroleum Exporting Countries, a $76.5 billion deficit with Canada and a $50.1 billion deficit with Mexico. Canada and Mexico are America’s partners in the North American Free Trade Agreement. The deficit with the countries of South and Central America rose to a record $50.7 billion last year.

A huge 39.4 percent jump in petroleum imports, which rose to $251.6 billion, was a major factor contributing to last year’s deficit increase. The price of those imports rose to an all-time high, reflecting tight global supplies. The United States was forced to import more oil in the fall after Hurricane Katrina caused widespread shutdowns of Gulf Coast production.

American consumers continued their love affair with all things foreign, pushing imports of cars, foreign food products and other consumer goods to all-time highs in 2005.

The rising trade deficits must be financed by increased borrowing from foreigners, who so far have been happy to sell us their products and hold U.S. dollars in payment which they invest in U.S. stock, bonds and other assets. The concern is that at some point foreigners will want to reduce their dollar holdings. If the change occurs at a rapid pace it could send the value of the dollar, U.S. stocks and bond prices all plunging.

Yep, things might look nice in January, but the long term outlook is disasterous.

 

[Aaron J Williams]

So when the economy completely crashes and our whole money system is destroyed I won't have to worry about paying off my mortgage or my credit cards,right?

 

[barry2952]

According to the new bankruptcy laws you will still be on the hook. Someone will come after you. The CC companies will probably employ Terminator-like machines to track you down.

Actually, I agree with the new laws. It was way too easy to skate on your obligations before.