Plus: Global Recovery Questioned, OECD Unemployment Stabilizes and Retail Container Traffic Grows.

Trade Gap Widens Significantly
The United States trade deficit expanded to $46.3 billion in August, a nearly 9 percent increase over the revised $42.6 billion total in July, due in large part to a record-high trade gap with China, according to the U.S. Department of Commerce on Thursday. August exports rose to $153.9 billion, while imports climbed to $200.2 billion.

In August, the goods deficit grew to $59 billion, a $3.9 billion increase over July, while the services surplus rose by $0.1 billion to $12.6 billion. Goods exports remained relatively unchanged at $107.7 billion, although there were decreases in capital goods and increases in industrial supplies and materials. Goods imports grew $3.9 billion to $166.7 billion, mostly due to increases in consumer goods, capital goods and automotive vehicles, parts and engines. Services exports rose to $46.2 billion, while services imports increased to $33.5 billion.

“The August trade deficit was the second biggest since October 2008 when the global financial crisis accelerated, and confirmed a trend of widening gaps that began in mid-June 2009,” Agence France-Presse reports. “The strong surge in U.S. demand for imports, despite a weaker dollar, could lower widespread expectations the Federal Reserve will resume major asset purchases to boost the recovery.”

The trade imbalance with China was the single largest driver of the widening trade gap in August. U.S. imports of Chinese goods rose from $33.2 billion in July to $35.2 billion in August, while U.S. exports to China fell from $7.3 billion to $7.2 billion. This $28 billion deficit with China set a monthly record.

“The widening gap with China comes amid rising concerns in Washington about China’s trade dominance and its effect on the global economic recovery,” the New York Times reports. “The Obama administration and some lawmakers are pressing China to allow its currency to appreciate more quickly, hoping it will temper Chinese exports by making them more expensive.”

Concerns Linger over Global Recovery’s Strength
Near-term prospects for global economic growth will be dominated by a halting and uncertain rebound in advanced economies, which is already muting the strength of demand for exports, according to the Manufacturers Alliance/MAPI Global Report — October 2010.

“[T]he shaky outlook for the largest common market in the world, in tandem with unexpectedly weak data from the U.S., has…given rise to concerns about the stability and strength of the global recovery even beyond the beleaguered industrialized economies,” MAPI economist Cliff Waldman said in an announcement of the report.

Gross domestic product (GDP) in other industrialized countries, including Canada, the Eurozone and Japan, is expected to slow from a 2.6 percent compound annual rate during the second quarter of 2010 before reaching a trough of 1.9 percent during the first half of 2011, according to Waldman. Following that, MAPI sees industrialized-country growth advancing to 2.2 percent during the second half of 2011.

In terms of growth rates, developing countries will likely continue to outperform their industrialized counterparts, as has been the trend in recent decades. Aggregate developing-country GDP is expected to slow from 5 percent during Q2 2010 to 4.4 percent by Q1 2011 before accelerating to 4.7 percent during Q2 2011 and back to 5 percent during the second half of 2011.

MAPI anticipates that the 2010 growth rate of total U.S. exports of goods and services will be 12.5 percent, a solid improvement over the 9.5 percent contraction in 2009. However, as a result of slowing global activity, export growth is expected to moderate to 8.1 percent in 2011.

OECD Unemployment Stabilizes, but U.S. Jobless Claims Rise
Although the global job market remains fragile, unemployment rates appear to have stabilized across many developed countries, with jobless rates bottoming out or beginning to gradually decline in industrialized nations.

According to a report from the Organisation for Economic Cooperation and Development (OECD) last week, unemployment in the OECD area fell from 8.6 percent in July to 8.5 percent in August, indicating that unemployment “now appears stable across OECD countries.”

While the U.S. unemployment rate remained unchanged at 9.6 percent in August, the OECD report claims this is additional evidence that the jobs decline has stopped. However, the overall OECD unemployment rate of 8.5 percent was still close to post-World War II highs.

Unemployment was highest in Spain (20.5 percent), the Slovak Republic (14.6 percent), Ireland (13.9 percent), Hungary (10.9 percent) and Portugal (10.7 percent). The lowest rates among OECD member states were in South Korea (3.4 percent), Austria (4.3 percent) and the Netherlands (4.5 percent).

Meanwhile, first-time U.S. jobless claims in the week ending Oct. 9 rose to 462,000, a 13,000 increase from the previous week’s total, according to the U.S. Department of Labor on Thursday. The four-week moving average also rose 2,250 to 459,000, the first increase after six consecutive weeks of declines.

The latest Labor Department data illustrate “a weak economy that is slowly recuperating more than a year after the recession officially ended,” the Associated Press explains. “Businesses are unable to raise prices because of high unemployment that is not expected to ease for months, perhaps years.”

Growth Expected in Retail Container Traffic
Import cargo volume at the nation’s major retail container ports is expected to be up 11 percent in October over the same month last year and should continue to see strong year-over-year growth through the remainder of 2010, according to the latest monthly Global Port Tracker report, released by the National Retail Federation and Hackett Associates last week.

Based on the latest available data, U.S. ports handled 1.42 million twenty-foot equivalent units (TEU) in August, up 3 percent from July and 23 percent from August 2009. It was the ninth consecutive month to show a year-over-year improvement. U.S. ports are estimated to have handled 1.37 million TEU in September, a 20 percent increase over last year. October is forecast at 1.32 million TEU, up 11 percent; November at 1.21 million TEU, also up 11 percent; and December at 1.12 million TEU, up 3 percent.

The first half of 2010 totaled 6.9 million TEU, up 17 percent from the same period last year. The full year is forecast at 14.7 million TEU, which would be up 16 percent from the 12.7 million TEU in 2009. Nonetheless, this year remains below the peak of 16.5 million TEU seen in 2007.

“Cargo is still coming through, but retailers are mostly stocked up for the holiday season,” Jonathan Gold, NRF vice president of supply chain and customs policy, said in a statement. “Retailers aren’t going to say the recession is behind them until their customers tell them it is, but we are hoping to see some sustainable economic growth over the next several weeks. The goal is that inventory levels will match sales as closely as possible.”