The Euro Zone showed an improving current account surplus with the release of the January data according to the European Central Bank. The EU-27 surplus rose to a record high $34.9 billion in January. The current account balance is a broad measure of an economy’s international financial positive. Think of it as cash flow. What this mean is that the EU-17 is exporting more than it is importing, and currency is moving into the zone. This is good news for them and for the US in that a stable/mildly expanding EU provides for markets for US goods and removes a financial threat to global stability. A collapsing Europe is bad for everyone.
While the good news is found in Italy and Spain, it is primarily due to German-made goods being in demand globally. France is still running a deficit, as is the USA.
Lagging behind but still showing a favorable trend, US exports are increasing as our imports are holding essentially flat ($1.583 trillion and $2.267 trillion, respectively). Exports are up 2.0% year-over-year while imports are down 0.4%. A continuation of this trend would help strengthen our financial position as a nation and is good for our future.
