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.
Sign up for Kiplinger’s Free E-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.
-
Do You Really Need That Wine Cellar?Home Features Wine cellars are a popular feature in high-end houses. Will installing one in your home increase its value, or would you be better off with a cheaper solution?
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
The New AI Agents Will Tackle Your To-Do ListThe Kiplinger Letter Autonomous AI agents “see” your computer screen, then complete a task, from buying a concert ticket to organizing email. This opens up a world of possibilities.
-
AI’s Medical RevolutionThe Kiplinger Letter Medicine is a field ripe for finding both exciting and practical uses for AI. The tech is already being used by doctors and researchers.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
AI Heads to WashingtonThe Kiplinger Letter There’s big opportunity for AI tools that analyze MRIs and other medical images. But also big challenges that clinicians and companies will have to overcome.
-
The AI Doctor Coming to Read Your Test ResultsThe Kiplinger Letter There’s big opportunity for AI tools that analyze CAT scans, MRIs and other medical images. But there are also big challenges that human clinicians and tech companies will have to overcome.
-
The New Space Age Takes OffThe Kiplinger Letter From fast broadband to SOS texting, space has never been more embedded in peoples’ lives. The future is even more exciting for rockets, satellites and emerging space tech.
-
Rising AI Demand Stokes Undersea InvestmentsThe Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
