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During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Trade Deficit Worries


PETER VILES, CNN CORRESPONDENT: It was a buying binge by Americans, but we spent the money on foreign cars, on foreign oil, clothing made in China, television sets made overseas. The trade deficit hit a staggering $41 billion in September. Year-to-date, it now stands at $366 billion. That's up 21 percent over last year's record-setting pace, which means the United States is basically giving away part of its economic recovery.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: A lot of the stimulus is essentially leaking out of the U.S. through this demand for imports and stimulating foreign economies, in particular manufacturing sources, like China.

VILES: The China deficit is the biggest, $89.7 billion through September. We're running a $67 billion deficit with the European Union, $40 billion with Canada, just under $31 billion with Mexico.

Still, the Bush administration, while it has been pushing China on some issues, has maintained that increased trade generally helps the American economy.

DON EVANS, COMMERCE SECRETARY: The CEA just had a report that I looked at that said, when our imports increase in a sector of our economy, jobs also increase in that sector of our economy. And it's because how integrated and interlinked this global economy is becoming.

VILES: But others are worried. Warren Buffett says the trade deficit has caused him to start betting against the dollar.