The economic situation in the United States has changed dramatically during the past month. Exports?
The economic situation in the United States has changed dramatically during the past month. Exports and investment in plant and equipment were up, inflation and even food prices were beginning to show signs of falling.
Now the Arab boycott on oil exports to the United States, and the rising world prices of oil threaten to upset the United States economy with unpredictable consequence. The United States had a trade surplus of 873.3 million dollars (349.3 million sterling) in September, but there are estimates that by the beginning of next year, the cost of imported oil will add 10 per cent to the total import bill.
Some U.S. economists fear that in the next few months there will be a combination of rapid price and wage inflation, together with minimal growth and rising unemployment. The result will be another round of inflation caused by accelerated costs, similar to the inflation suffered by the United States in 1972.
As oil dominates the U.S. economic situation, a report published by the American Petroleum Institute, claims that imports of oil into United States were higher, by 31 per cent, in the ten months of 1973, than during the same period in 1972. The report indicated that declining domestic production has forced the oil companies to get over a quarter of the nation's oil from foreign producers this year.
There have also been charges that some U.S. oil companies have been shipping oil overseas for reimportation to the United States.
A Cost of Living Council study has shown a dramatic increase in the export of fuel oil from the United States this year, despite the serious shortage of fuel on the domestic front.
SYNOPSIS: The fuel crisis in the United States threatens to cause an upheaval in the country's entire economy...More and more, the U.S. has had to depend on foreign imports to meet the nation's needs. This could mean a change from a trade surplus to a trade deficit as the price of petroleum products increases. Last year alone, the U.S. oil imports have increased about thirty per cent.
Last week, President Nixon called on the country to conserve fuel. He detailed a number of ways that oil and petrol could be saved. But even if these measures were carried out to the fullest, rationing might be necessary in the near future.
And some U.S. economists fear that in the next few months there will be a combination of rapid price and wage inflation, together with minimal growth and rising unemployment.
Even with the critically low supplies of oil, one report indicates that exports of U.S. oil supplies could reach a record level this year.
For the United States, the oil crisis adds a new element that threatens the entire growth and development of the economy.