Trade figures: A turn for the worse

Further signs that the recovery is weakeningNO SOONER have Americans come to terms with their second-quarter economic slowdown than economists have started warning that the news is worse than they first let on. Output growth slowed to an annualised rate of 2.4%, according to the government’s initial estimate, down from a 3.7% rate during the first quarter. Among the chief culprits was a widening trade gap. Imports grew nearly three times as fast as exports for the period, producing a bigger drag on output. As Christina Romer, the outgoing head of Barack Obama’s Council of Economic Advisers, lamented, “A bit of you keeps saying that if only those were American products, think of how high GDP growth would have been.”That difference between what could be and what is continues to grow. On August 11th the Census Bureau reported a nearly $8 billion increase in the trade deficit between May and June. Imports rose by $6 billion while exports declined, leading to a $50 billion monthly trade gap: the largest since 2008. Economists estimated that this new data could trim nearly half a percentage point off second-quarter growth. ...