Current account deficit
March 17, 2005
The Commerce Department released figures showing that the country’s current account deficit was reaching new records, reaching $665.9bn (£345.4bn) in 2004.
The deficit increased substantially in the fourth quarter, increasing by 13% to $187.9 billion, particularly due to rising oil costs.
The US current account deficit reached a record - driven by rising oil imports and consumers’ appetite for foreign goods.
As a percentage of the total economy the current account budget also set a record, rising to 5.7% from 4.8% in 2003.
Retail sales continue growth
March 16, 2005
Retail sales continued to grow across January and February, despite market fears of a reverse.
The Commerce Department released figures showing January growth was at 0.3% - against market fears of a 0.3% fall - while Fenruary retail growth was up 0.5%.
Rises in the price of oil do note appear to have dampened consumer spending, though expected interest rate rises may ensure that retail growth over the following months will be more modest.
Greenspan suggests Consumption Tax
March 3, 2005
Federal Reserve chairman Alan Greenspan has suggested that a consumption tax, similar to the European VAT, should form a part of US tax reforms.
Speaking before a presidential tax advisory panel, he suggested that to reach a consumption tax only system would require a hybrid to be developed by initial reforms, combining income tax and consumption tax together.
The change is being viewed as just one measure that might help add longer-term financial stability to the US economy, particularly for encouraging saving and capital formation.
The idea of a consumption tax has already been suggested before, and critics have argued that it would mean that the poorer would get poorer.
Those in favour have suggested that a consumption-only tax could only result in the richer footing more of the bill.
However, Greenspan warned that any tax reforms had to try and keep the system as simple and accessible as possible.
Industrial growth still strong
March 1, 2005
Industrial production in the US increased for the 21st month in a row, despite a slight downturn in growth.
The Institute for Supply Management (ISM) index measured industrial product at 55.3, which is down slightly on the 56.4 reported in January.
This means that although the overall rate of growth is slowing down, material shortages and pricing are becoming less of a problem.
The ISM’s index of national manufacturing activity is compiled from the responses of purchasing executives at more than 400 industrial companies.