February trade deficit increases to $39.7 billion

Structural deficits expand (accelerate) or contract (decelerate) with marginal changes in demand. The deficit accelerates during the liquidity injection phases of the depressionary box as marginal demand up ticks. The deficit decelerates during the hemorrhage phases as marginal demand down ticks. What makes this relationship structural is that regardless of the direction of marginal demand and phase, a deficit, which digs the US deeper into the debt hole, always exits. In other words, it is business as usually and nothing has changed.

The U.S. trade deficit widened more than expected in February as exports rose to the highest level in 16 months but this gain was offset by a bigger jump in imports, reflecting increased demand for consumer goods from televisions to clothing.

Net Exports (Census Basis) As A % GDP:


The economic "recovery" a less publicized cost of import and export price increases. The rise in import prices (crude, energy, made in china things, etc), north of 10% year over year log, is particularly steep. If wages fail to keep pace with these increases, its either TS policy (tough sh*t) or further centralized assistance to the rescue.

Import and Export Price Change YOY:


Source: finance.yahoo.com