World Economy

US Trade Deficit Widens

US Trade Deficit WidensUS Trade Deficit Widens

The US trade deficit rose in January as American exports fell for a fourth straight month, the commerce department said.

The gap between exports and imports hit $45.7 billion in January from $44.7 billion in December. Exports of goods and services fell 2.1% in January to $176.5 billion, lowest since June 2011. American exporters have been hurt by weakness around the world and by a strong dollar that makes US products more expensive overseas, News Journal reported.

The high dollar should be helping imports by making them cheaper in America. But imports slid 1.3% to $222.1 billion in January, lowest since April 2011. Lower oil prices explain part of the drop. Petroleum imports of $11.2 billion were the lowest since November 2003. But January imports of autos and auto parts hit a record $30.6 billion.

Taking the deficits into account, Rogers Holdings chairman Jim Rogers said he is certain that the US economy will be in recession in the next 12 months.

During an interview on Bloomberg TV, the famous investor said that there was a 100% probability that the US economy would be in a downturn within one year.

“It’s been seven years or eight years since we had the last recession in the US and normally, historically we have them every four to seven years for whatever reason—at least we always have,” he said. “It doesn’t have to happen in four to seven years but look at the debt, the debt is staggering.”

Rogers was not specific on what could trigger a disorderly deleveraging process and recession, but claimed that sluggish or slowing economies in China, Japan, and the eurozone mean that there are many possible channels of contagion.

The US economy is already faltering, he said. “If you look at the…payroll tax figures (in the US), you see they’re already flat,” he concluded. “Don’t pay attention to the government numbers, pay attention to the real numbers.”