International Trade

Highlights for June 2002

• U.S. imports of non-petroleum goods were nearly constant (using inflation-adjusted dollars) in 2000, 2001 and the first half of 2002. Exports were steady in 2000 and 2001, but fell sharply this year. In a recession-depressed market, steady imports take up a larger share of sales, depressing production and employment and cutbacks in production for export reinforce the weakness in employment. The adjustment for inflation helps clarify the trade-related downward pressure on employment from both the import and export sides.

• Economic problems in Argentina and Brazil are showing up in sharply lower U.S. exports to those countries, while imports have remained close to last year’s levels. The result – small U.S. surpluses with both countries last year have become deficits this year.