The Economy’s Rebalancing Act

Consider it a good omen. In October the U.S. trade deficit dropped unexpectedly to $58.9 billion, about $5.4 billion less than in September. Although the largest cause was lower oil prices, strong American exports — up 14 percent from a year earlier — also contributed significantly. And that’s exactly what the economy needs in 2007: an export surge. It would ward off recession and narrow today’s dangerously large global trade imbalances. We need what economists call a “rebalancing” of our economy and the world’s.

With unemployment at 4.5 percent, the U.S. economy is hardly ailing. But three threats cloud the outlook.

washingtonpost