us trade gap widens; surely a plus for the us economy?

Discussion in 'Economics' started by TGpop, Aug 14, 2010.

  1. TGpop


    forgive my inexperience, but i just read a bloomberg article on the doom and gloom prospects of the us and global economy, among the lower profit expectations, weak consumer data etc they say the trade gap widening by 8 billion or so shows weakness? how so? surely thats means MORE spending, and 'sucking in' imports? or is it a case of the us economy spending the same , but the global economy spending less on US exports?
  2. No, it's not a plus as it implies that global imbalances that existed prior to the crisis (and contributed to it) remain. That, in turn, means that the issues of US budget deficit and govt debt won't be going away in a hurry.