The Trade Deficit

The September figures are out: Total Imports S149.0 billion--up 1.5%. This is not a drastic figure, but this is: non-oil imports hit a record $109.0 billion. The latter figure is the best indicator that the Economy is dumping Jobs, with Chinese imports rising 1.7% to $ 18.46 billion.
This is confirmed by new Unemployment claims standing at 333,000. This number states that Turnover rates are about 100,000 new claims too high, for it to be normal or seasonal Turnover. It is also not good that the new rise in imports came in Oil and Auto parts, definite indications that industrial manufacturing is retreating, and that American Oil exploration is not being conducted at viable rates--no new Jobs in this sector.

The Blog, Marginal Revolution, has a Post this morning on the effect of the falling Dollar. The conclusion reached was, in the main, the major threat would be in rising Interest rates to prop up the Dollar. This threat is not especially a great threat: A rising Interest rate would contract American Consumption levels, while not seriously affecting current economic performance--less than absolute perfect. This would bring on American Consumer pay down of Consumer Debt, a most necessary condition, as this negative-Savings begins adverse impactual levels on Household stability.

The real impact of the dropping value of the Dollar comes in sudden, immediate sharp increases in Import pricing. Most Economists and Business interests declare Exports would automatically rise, which may not actually be the case. Rising Import costs will sweep the board, and recent imports increases have come in the area of manufacturing, especially in the arena of Assembly Parts. Business interests would not be able to keep production costs down. The rise in Import prices could well bring on greater levels of Unemployment, as Consumer Demand would not be able to bail Us out of a downslide, and Exports could actually decrease. lgl