Economy Watch: Trade Deficit Up; Gas Prices Down; Trillion-Dollar Coin Idea Nixed
The trade deficit for both goods and services was up in November. Gas prices are foreseen to decline in 2013. And the trillion-dollar coin idea has been tossed by the federal government.
By Dees Stribling, Contributing Editor
The U.S. Department of Commerce reported on Friday that the trade deficit (both goods and services) was up to $48.7 billion in November, compared with $42.1 billion in October. The nation managed to export $182.6 billion of its wares during the month, while importing $231.3 billion worth of goods and services. Both exports and imports were up month-over-month.
The relatively strong amount of exports is partly a reflection of the renewed strength of the U.S. manufacturing sector. Exports were up 3.3 percent in November 2012 compared with the same month in 2011, and are now about 10 percent higher their pre-recession peak. Imports aren’t quite back to their pre-recession peak, but were up 2.5 percent year-over-year in November 2012.
Oil and China still account for most of the deficit. That’s despite the fact that China’s economy has slowed down, and that the price of oil hasn’t gone up that much in recent months. The trade deficit with China was $28.95 billion in November, up from $26.78 billion during the same month a year ago.
Gas Prices to Come Down
Though gas prices trended down during much of 2012, there was an uptick toward the end of the year. But the Energy Information Agency doesn’t expect that to last long into 2013, because it foresees a decline in oil prices in the immediate future.
According to the EIA’s latest Short-Term Energy Outlook, which the agency released last week, the Brent crude oil spot price, which averaged $112 per barrel in 2012, will fall to an average of $105 per barrel in 2013 and $99 per barrel in 2014. The projected discount of West Texas Intermediate crude oil to Brent, which averaged $18 per barrel in 2012, ought to fall to an average of $16 per barrel in 2013 and $8 per barrel in 2014, as planned new pipeline capacity lowers the cost of moving mid-continent crude oil to the Gulf Coast refining centers.
That means that price of gas will also fall in the coming years, barring some sort of disaster that affects the oil market. But they will not fall precipitously. The EIA expects that falling crude prices will help national average regular gasoline retail prices decline from an average $3.63 per gallon in 2012 to $3.44 per gallon and $3.34 per gallon in 2013 and 2014, respectively.
Trillion-Dollar Coin Nixed
Probably because the more sober elements of the federal government were tired of fielding questions about the ridiculous idea of a trillion-dollar coin, the matter was officially put to rest over the weekend. ”Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” said Anthony Coley, a spokesman for the U.S. Department of the Treasury said in a statement on Saturday.
Wall Street ended the week with a lackluster mixed session on Friday. The Dow Jones Industrial Average gained 17.21 points, or 0.13 percent, while the S&P 500 was down 0.07 percent and the Nasdaq advanced 0.12 percent.
