June Trade Gap Numbers

Trade gap figures for June came out today at $64,804,000,000.00.
May was revised up from $63.835 billion to $64,974,000,000,00.

Some things that jumped out at me from the report:
1. The trade surplus in services declined for the second month in a row, including a significant downward revision in May's number.

Reaching this point was likely, given how America has sold off so much intellectual property and how the rest of the world has caught up enough in terms of education, training and expertise. If the dollar can fall substantially, then the service surplus may start rising again. The powers that be don't seem willing to let that happen, so we'll be forced to sell off a more of our economic advantages and assets.

2. The petroleum trade deficit has risen to 35% of the total goods deficit, up from 28% a year ago.

This should get even worse with BP taking 400,000 barrels of Alaskan production off line. It could add about $1 billion to the trade gap each of the next couple months, depending on oil prices and whether or not we tap into the strategic reserve. When BP was allowed to purchase ARCO a few years back, it was another example of the US selling off important economic interests to fund the trade gap. Foreign acquisitions of US companies and assets have continued at an accelerating rate, and we can't expect foreign companies to run their US subsidiaries in the best interests of the US economy.

Brazil has achieved energy self-sufficiency with it's ethanol program. We could do the same and be world leaders in the field of alternative energy sources... just not with this president.

3. The trade deficit for non-petroleum goods has been trending down all year and is down year-over-year.

This is where the squeezing of the American consumer is showing up. Rising energy prices and debt service aren't leaving much money left for discretionary spending.

The following chart shows recent trends from the Trade Gap report: