Trade deficit grew in September by largest percentage in 10 years
WASHINGTON — A weaker dollar may boost the nation's economy by increasing exports and narrowing the trade gap — but that won't happen anytime soon.
Instead, the nation's trade deficit rose in September by the largest percentage in a decade as U.S. exports grew for the fifth straight month, but imports rose faster, a government report showed yesterday. That trend is likely to continue until the middle of next year, economists said.
Rising oil prices and higher purchases of foreign goods by U.S. companies drove imports higher. So did more purchases of foreign parts by U.S. manufacturers, which are ramping up production in the fledgling economic recovery.
Higher exports, spurred by a lower dollar, probably won't reduce the trade gap and boost the U.S. economy until 2011, economists said.
Imports in September rose 5.8 percent from August, led by a 20 percent jump in oil shipments. That's the biggest rise in imports in 16 years. Exports, meanwhile, increased about 3 percent, reflecting stronger sales of American autos, aircraft and industrial machinery.
FEDERAL PENSION GUARANTOR DEFICIT SOARS; OUTLOOK GRIM
WASHINGTON — The government-chartered company that insures the pensions of one in seven Americans said yesterday that its deficit this year nearly doubled to $22 billion.
That's an improvement over the Pension Benefit Guaranty Corp.'s midyear record deficit of $33.5 billion, which spiked as automakers and other companies faltered and caused the insurance fund's liabilities to spike.
Yet experts and officials say the long-term picture is grim. They say that without major changes, such as higher insurance premiums and less risky investments, the fund eventually will require a taxpayer bailout.
"We could face much higher deficits in the future," PBGC acting director Vincent Snowbarger said in a statement.
"We won't fail to meet our obligations to retirees, but ultimately we will need a long-term solution." The PBGC's finances this year have been battered by the weak economy, which put it on the hook for 144 new pension plans that failed during the year ended Sept. 30. That compares with 67 in the previous year.
Low interest rates added to the sea of red ink, because the PBGC can't count on inflation driving down the value of future payouts.