U.S. Trade Deficit Soars to a Record $33.1 Billion

The U.S. foreign trade deficit soared to a record $33.1 billion from July through September as American farm sales skidded to their lowest pace in more than six years, the government reported Wednesday.

The deficit for the third quarter topped the old record of $30.9 billion set in the October-December period of 1984 and was 15.9% higher than the $28.6-billion deficit in the second quarter this year.

The new report showing a deterioration in the country’s merchandise trade deficit confirms parallel figures released two weeks ago that showed an even larger $38.3-billion deficit in the third quarter this year. The latest report, covering merchandise trade on a balance-of-payments basis, is smaller because it omits such factors as military sales and the cost of shipping and insurance.

For the first nine months of this year, the trade deficit is running at a seasonally adjusted annual rate of $113.6 billion, slightly lower than the $114.1-billion deficit for all of 1984.

However, most experts expect this year’s deficit to top last year’s mark despite the fact that the dollar has been declining against foreign currencies for most of the year.

While the strong dollar is blamed for about half of the country’s trade difficulties, most experts say beleaguered U.S. manufacturers and farmers will not begin to see improvements in the trade deficit until the latter half of next year because of the amount of time it takes for a lower dollar to reduce imports and boost exports. Cheaper dollars make U.S. goods more competitive.

During the third quarter, imports rose 4% over the level in the second quarter to a new total of $85.5 billion, while exports were declining 3% to $52.3 billion.