- The Washington Times - Wednesday, May 13, 2009

Despite weak performances in three areas - trade, home sales and job openings - the U.S. economy appears closer to stabilizing, though at low levels, economists said.

The Commerce Department said the trade deficit widened to $27.6 billion in March, from February’s revised $26.1 billion gap, which had been the smallest since November 1999.

Through the first three months of this year, the trade deficit ran at an annual rate of $359.7 billion, far below last year’s $681.1 billion. Economists expect the deficit will remain low this year as the U.S. recession depresses demand for foreign goods.

The global downturn also has cut into sales of U.S. exports. That could limit any improvement in the trade gap, which reflects the higher value of America’s imports compared with its exports.

The export slump has been a blow to U.S. manufacturing giants such as 3M Co. and Honeywell International Inc. that derive a large part of their sales from foreign markets.

For March, exports of goods and services fell 2.4 percent to $123.6 billion. That was the lowest level since August 2006. Sales of farm products dropped $2.4 billion, while exports of capital goods slid $1.7 billion, led by big declines in sales of civilian aircraft, telecommunications equipment, semiconductors, and domestic autos and auto parts.

U.S. imports also fell despite imports of oil rising 6.2 percent to $17.2 billion, the highest level since January. But analysts said the minor drops pointed to a leveling-off point, rather than future declines.

The March trade deficit also was smaller than the one the government assumed when it released its first estimate, showing the overall economy fell at an annual rate of 6.1 percent in the January-March quarter. That means the next estimate for the first quarter likely will be revised to show a drop of around 5.7 percent, analysts said.

Meanwhile, home prices in the U.S. also continue to fall, though that has prompted sales gains in a handful of states. The National Association of Realtors said median sales prices of existing homes declined in 134 out of 152 metropolitan areas compared with the same period a year ago. Nationwide, sales of foreclosures and other distressed properties made up about half of the market.

The median sales price nationwide was $169,900, down 13.8 percent from a year ago. The median price is the midpoint, which means half the homes sold for more and half for less.

But the nascent signs of recovery in the housing market could be short-lived if employers lay off more workers in large numbers.

Many economists say the unemployment rate, which reached 8.9 percent in April, will climb to around 10 percent even if the recession ends and a recovery begins sometime this fall.

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