It's not news that the US current account, trade balance and trade balance ex.-oil are all moving toward zero percentage points of GDP. As I've observed before, time will tell how much of this movement is durable (see Bertaut, Kamin and Thomas for skeptical look; see also Cline-Williamson); this in turn depends on whether the adjustment reflects standard macro effects, including a permanent downshift in US consumption growth [0], and how much reflects perhaps transitory effects like a credit crunch in trade financing (as speculated upon here). Here's the trade balance situation for the US.

Figure 1: Net exports to GDP (blue), net exports ex.-oil to GDP (green), and current account to GDP (green). NBER defined recession dates shaded gray; assumes current recession has not ended by 2009Q1. Source: BEA, 2009Q1 GDP preliminary release (28 May 2009), NBER, and author's calculations.

The trade balance

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