May 13

Written by: Russ Henke
5/13/2007 7:20 AM 

Again this past week, the economic news contained
some ominous signs for the businesses and people
of the United States.

Here are just a few items:

- The US Trade Deficit surged in March '07,
up 10.4% from the February level. So far
this year, the US trade deficit is running
at an annual rate of $723 billion, just
a tad below the $765 billion deficit set
in 2006, the fifth consecutive year of
record trade deficits.

- And this was reported as good news: "In
a reversal of recent trade trends, the trade
deficit with China improved in March 2007,
growing by (only) $17.2 billion compared with
an increase of $18.4 billion in February."

- Growth of the US economy, as measured by the
GDP, slowed to an anemic rate of just 1.3%
in Q1 2007, per recent reports. The new trade
deficit number may end up lowering that Q1
GDP figure to 0.7%.

- The Treasury Department said on May 10
that through 7 months of this fiscal year, the
Federal Deficit grew by "only" $80.8 billion.
The federal budget was in surplus for 4 years
from 1998 through 2001. But the 2001 recession,
the IRAQ war, & Bush's tax cuts have put the
budget deep into red ink again, starting in 2002.
Deficits are expected to balloon again soon with
the higher Social Security & Medicare payments
needed as 78 million baby boomers retire.

- Consumer confidence in terms of peoples' feelings
about how the economy and their own finances will
fare over the next six months fell this week to
24.3, a nine-month low.

- Retail sales at stores open at least a year, known
as same-store sales, fell by a record 2.4% in April,
the worst since 1970. Wal-Mart's same-store sales
fell by 4.6% while Target's dropped by 6.1% !!

- Gasoline prices surged this week to a record
nationwide average of $3.07 per gallon, nearly
20 cents higher than two weeks earlier, according
to the latest Lundberg Survey. Regular gas in CA
rose to $3.66 per gallon.

- Not everyone feels the pinch: "Dow index rallies
111 points on May 11, scores fifth straight weekly
gain."
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