According to the most recent economic data released this week, there are more indication’s the President Obama’s economic recovery stimulus plan is working. The U.S. trade deficit in July hit the highest level in six months as a record rise in imports outpaced a third straight month’s increase in foreign demand for American products, according to government data released Thursday. Both gains provided more evidence that the worst recession since the 1930s was losing its grip on the global economy.
A rebound in the American labor market has yet to take hold, but first-time claims for jobless benefits did fall more than expected last week.
Companies are laying off fewer workers as the U.S. economy shows consistent signs that the recession is over – or at least receding. The Federal Reserve said Wednesday that 11 of its 12 regional banks reported the economy is stabilizing, an improvement from previous reports. The Commerce Department also said Thursday that the trade deficit rose 16.3 percent to $32 billion in July, much larger than the $27.4 billion imbalance that economists had expected. It was the largest imbalance since January and the percentage increase was the biggest in more than a decade.
Imports rose 4.7 percent to a total of $159.6 billion, the largest monthly advance on records that date to 1992 and the second consecutive gain after 10 straight declines. The rebound reflected a 21.5 percent spike in imports of autos and auto parts, partly due to increased production at U.S. auto plants owned by General Motors and Chrysler that had been slowed when the companies were struggling to emerge from bankruptcy protection.
Exports edged up 2.2 percent to $127.6 billion. It marked the third straight monthly increase, but left exports well below their record level of $164.4 billion set in July 2008. The export gains reflected big increases in shipments of civilian aircraft, computers, industrial machinery and medical equipment.
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