The most telling indicator of the impact imported oil has on the U.S. economy is the monthly trade imbalance statistic. For example, take away the $2.76 billion increase in payments for imported oil in March, a rise that primarily reflects a 23% jump in domestic demand, and the month's $40.4 billion trade deficit -- a 12-month high -- would have declined from February's $39.4 billion.
Imports of services fell in March to $32.7 billion from $33.1 billion in February, but imports of goods -- among them, oil -- rose to $155.6 billion from $149.6 billion, according to U.S. Commerce Department data. Overall in March, exports rose 3.2% to $147.9 billion, and imports increased 3.1% to $188.3 billion.
Of course, critics will argue that's like saying the weather in Arizona is fine, if you're willing to ignore a little summer heat. The high cost of imported oil continues to drag against U.S. economic growth, while transferring income, wealth and jobs to foreign nations.
Benefiting From Growth in Developing Nations
Even so, the petroleum issue shouldn't blot out the more significant, long-term story: The global economy is growing, and international demand for U.S.-made goods and services is increasing. Although still down from their July 2008 peak of $164.4 billion, U.S. exports have risen impressively in the past 15 months, up 19.3% to $147.8 billion in March from $123.9 billion in January 2009.
At least initially in the current economic expansion, the U.S. is benefiting from the development of nations in Asia, Latin America, and Eastern and Central Europe as business increases with foreign companies and consumers. If that upward export trend continues, it will help offset the loss of U.S. GDP and jobs to the transfer of operations to lower-cost production centers abroad.
IHS Global Insight chief U.S. economist Nigel Gault agrees. In a commentary emailed Wednesday, Gault calls the March trade deficit report "a positive report for the U.S. and global growth outlook. It showed sharp increases in both export and import volumes, indicating that the world trade recovery still has plenty of momentum."
Policymakers and business executives around the world -- certainly those in the U.S. -- hope the increase in world trade has only just begun. In part due to that high U.S. imported oil bill, which continues to eat into Americans' disposable income, it's going to take engines of growth in every major economic region to return the world to adequate global GDP growth levels above 4%.
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