Borrowing and Spending
In the news today, there is new data about US borrowing from abroad, and retail spending at home. First the borrowing:
U.S. current account widens to record
WASHINGTON (MarketWatch) — The U.S. current account deficit widened by 21.3% to a record $224.9 billion in the fourth quarter, the Commerce Department reported Tuesday. The deficit amounted to 7.0% of the nation’s gross domestic product, also a record. Read full government report. For all of 2005, the current account deficit grew to a record $804.9 billion, totaling a record 6.4% of GDP. It’s the ninth annual record in the past ten years.
And now the spending:
Retail sales fall 1.3% in Feb.
WASHINGTON (MarketWatch) — U.S. retail sales fell 1.3% in February, the biggest decline in six months, dragged down by weak auto sales, the Commerce Department estimated Tuesday. Excluding autos, retail sales decreased 0.4%, the biggest drop since April 2004. Excluding both autos and gas, retail sales decreased 0.3%. There were steep declines in furniture and clothing stores and lesser drops in gasoline and restaurants.
Economists were not expecting such a large decline in retail sales. The average forecast in a MarketWatch survey called for a 0.8% decline. Excluding autos, sales were expected to fall 0.4%.
Congratulations are due to Brad Setser, who correctly predicted a CA deficit of $800+ billion last summer some time, if I’m not mistaken.
The retail sales data, being monthly, doesn’t really tell us much by itself. However, it is one more (rather dark-hued) grain of sand to add to our mandala depicting where the economy is going…