HAD ENOUGH?:

Account trade deficit posts unexpected improvement (Associated Press, 6/16/06)

The deficit in the broadest measure of foreign trade showed an unexpectedly large improvement during the first three months of this year, but soaring global oil prices are expected to limit such gains.

The Commerce Department reported Friday that America's current account trade deficit fell to $208.7 billion in the January-March quarter, down 6.5 percent from the all-time high deficit of $223.1 billion set in the final three months of last year.

The improvement far exceeded expectations which had the first quarter imbalance dropping by just $1 billion from the fourth quarter record high. [...]

The deficit must be financed by the willingness of foreigners to hold an increasing amount of U.S. assets. So far, that has not been a problem because foreigners have been more than willing to sell their cars, televisions and computers to Americans and hold dollars in return. That money is invested in stocks, Treasury bonds and other U.S. assets.

Consumers' mood brightens in June (Rex Nutting, June 16, 2006, MarketWatch)

U.S. consumers' mood improved for the first time since March in early June, according to proprietary research from the University of Michigan released Friday.

The UMich consumer sentiment index rose to a reading of 82.4 in June from 79.1 in May, according to media reports. The index peaked at 96.5 in July, before devastating hurricanes sent gasoline prices soaring.

Inflation expectations for the next year slipped to 3.4% from 4%, reports said. Federal Reserve officials are monitoring inflation expectations carefully as they try to keep prices under control.

Posted by Orrin Judd at June 16, 2006 4:42 PM