The improving appetite of both the U.S. and global economies is becoming evident. Trade statistics for February indicate increased demand for both U.S. imports and exports.
Recovering demand for motor fuel is driving up the price of imported crude oil. Rising imports of consumer goods suggest Americans are opening their wallets and purses wider. U.S. businesses are ramping up investment, drawing in foreign goods ranging from iron and steel products to finished computers. By the same token, foreign businesses are buying more U.S.-made capital goods, especially industrial engines and heavy machinery. And both imports and exports of autos and auto parts are on the rise, reflecting recovering intrafirm trade in the heavily integrated North American market.
With the U.S. recovery picking up speed, the demand for capital goods, oil, metals and other industrial inputs will increase in the coming months. We look for imports to climb 14% this year, after plunging 23% last year. At the same time, faster economic growth in Canada, Mexico and China will offset near-flat demand from the euro zone, Japan and the United Kingdom, pushing exports back into positive territory. Expect them to register a 14% increase in 2010, after falling by 15% in 2009. While exports and imports will grow at the same rate, the latter are growing from a much larger base. As a result, the net impact on U.S. economic growth will be a modest negative.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The trade deficit will expand for the first time since 2006, widening to more than $430 billion in 2010, the equivalent of 2.9% of gross domestic product. That follows its sharpest annual contraction in 18 years and its lowest level relative to the U.S. economy since 1998. Preliminary estimates put the U.S. trade deficit for 2009 at roughly $379 billion, or 2.7% of GDP.
Gains in sales to emerging markets will exceed losses from developed markets, but just by a bit. While Canada and Japan will show steady growth, the U.K. and parts of the euro zone will be lucky if they avoid tipping back into recession. By contrast, the U.S.’ top emerging markets in Asia and in Latin America -- China, Brazil, India, Mexico and South Korea -- are all on track for strong recoveries.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market TodayThe S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were up the day before a critical jobs report.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Over Age 65Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
How to Adopt AI and Keep Employees Happy
The Kiplinger Letter As business adoption of AI picks up, employee morale could take a hit. But there are ways to avoid an AI backlash.
-
The Rise of AI: A Kiplinger Special ReportThe Kiplinger Letter Our special report looks at the opportunities and challenges of generative AI and how its rapid move into the mainstream is impacting every aspect of our lives.
-
Big Changes Are Ahead for Higher EdThe Kiplinger Letter A major reform of higher ed is underway. Colleges are bracing for abrupt change, financial headwinds and uncertainty.
-
AI-Powered Smart Glasses Set to Make a Bigger SplashThe Kiplinger Letter Meta leads the way with its sleek, fashionable smart glasses, but Apple reportedly plans to join the fray by late 2026. Improved AI will lure more customers.
