The article begins by stating the improvement in the economy in the past month or so. People are being affected by this improvement in different ways. A few being at the gas pump, which is leaving everyone with some more money in their pockets, and in the stock market. It was also reported that even though it appears there is moderating growth in the economy, things are relatively stable at this point. Also a positive note, price inflation and decrease in consumer spending does not seem to be an issue in most parts of the country. In the next trade deficit report the falling fuel prices should greatly impact it, considering that this was one of the major reasons for the widening trade gap in August. Trade imbalance with China specifically was another aspect in the trade deficit.
What seems to be the case to me is that in order to prevent inflation from occurring again in the future, America needs to find a way to stop being so dependent on imports. Being so dependent on others provides an opportunity for them to be put in control. Clearly I am not an expert and have no idea what it would take to reach a point where our dependence could be lowered. However, in the article it stated how our exports have grown, but not enough to compensate for the import growth. So it seems that we need to increase our exporting in order to counterbalance the import inflation.
The New York Times, Jeremy W. Peters Thursday, October 13, 2006
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