Saturday, March 27, 2010

U.S. losing jobs to trade deficit with China

One reason why the price of dealer gold has remained strong is that many Americans remain unconvinced that an economic recovery has completely taken hold, and that a double dip recession could be on the horizon.

Among the various economic indicators that have provided mixed news in recent months, unemployment has been perhaps the most closely followed, having hovered at or around 10 percent since late last year.

The recession has resulted in millions of lost jobs, but it's not the only thing fueling the unemployment situation in the U.S., notes one report. According to new data from the Economic Policy Institute, the ever-increasing trade deficit between the U.S. and China resulted in 2.4 million lost jobs nationwide between 2001 and 2008.

The report cited an artificially low currency value in China as one of the leading contributors to the job losses, as well as the $2 trillion in foreign exchange reserves it has acquired since 2001.

One problem to watch for with a stubbornly high unemployment rate is whether consumer spending will be held back to a point that undermines the overall economy and continues to contribute to high loan and mortgage default rates.