After several months of improving numbers, the US external deficit is back on a downward trajectory. The deficit for March was much larger than expected; $64 billion - the highest deficit for 6 months.

The deterioration was on in the goods sector, where the deficit increased $6.0 billion from February to $70.2 billion. The services surplus was virtually unchanged at $6.3 billion. Although exports of goods increased by $1.8 billion, imports of goods increased by $7.8 billion to $160.3 billion.

According to the Commerce department, the $ 8.2 billion rise in imports was the largest dollar increase on record, while the 4.5 percent gain in imports was the largest percent change since November 2002. Higher oil prices accounted for around a quarter of that increase.

Thus, it would appear that despite the slowing economy, the US consumer is undeterred. We just keep on buying. However, here is the thing; if the economy is slowing, unemployment rising and wage growth moderating, how is the consumer financing all this additional buying?