Trade deficit up in the 1st quarter despite falling dollar

The image shows the trend of the GDP growth since the first quarter of 2000

Gross fixed investment fell for the 8th quarter in a row, reflecting the continuing stagnation in business investment and the continuing decline in new residential construction.

Despite the falling dollar, the trade deficit turned upward for the second quarter in a row. It was 4.97% of GDP in the third quarter of 2007, 5.04% in the fourth quarter of 2007, and 5.20% during the first quarter of 2008.

Some economists think that the falling dollar will correct the trade deficits. This is unlikely to happen so long as more and more countries pursue the mercantilist strategy of selling to the United States without buying from the United States.

Source: By Howard of Trade-Wars