U.S. 6-Month Trade Deficit Mounts to Record $79.5 Billion

The U.S. merchandise trade deficit for the first half of 1986 was a record $79.54 billion, contrasted with $64.59 billion for the first six months of 1985, the Commerce Department said today.

The deficit for June was an estimated $14.17 billion, up moderately from a revised shortfall of $13.12 billion in May, according to the Census Bureau’s monthly tally of the nation’s trade flow.

If the current trade pattern continues, the year-end trade shortfall will reach a record $160 billion, up from a record $148.5 billion in 1985.

Exports for the month rose about $800 million from a revised $18.27 billion in May to an estimated $19.07 billion in June, the bureau said.

Imports rose roughly $1.87 billion from a revised $31.4 billion to $33.24 billion.

“The fall in the dollar over the past year is just beginning to help the trade deficit,” Commerce Secretary Malcolm Baldrige said. “In addition, we need more growth outside the United States to see sustained improvement in the deficit.

Caution Abroad Cited

“Overly cautious economic policies abroad are preventing a return to more rapid worldwide growth and a better alignment of world trade.”

Manufactured exports rose fractionally from $12.27 billion in May to $12.3 billion last month while manufactured imports rose from $23.93 billion to $24.96 billion for June.

The deficit in manufactured goods was $12.66 billion, up from $11.66 billion the previous month.

The deficit in crude petroleum came to $2.03 billion, up from $1.73 billion the previous month.

The June export figure included a re-export of $2 billion in “non-monetary” gold sold to Japan, bureau analysts said. The nature of or reason for the gold sale was not immediately known.

Japan Trade Up

Overall exports to Japan rose sharply from $1.73 billion in May to $3.86 billion because of the sale. Imports from Japan also increased, from $6.73 billion in May to $7.5 billion last month.

The deficit with Japan fell back from $4.99 billion to $3.69 billion last month.

The deficit with Western Europe increased more than $1 billion to $3.75 billion while the deficit with Canada slipped back about $300 million to $1.89 billion.

Agricultural trade, which went into the red in May for the first time in 20 years, showed a smaller deficit last month, down from $349 million in May to $71 million last month. The deficit for the first half of the year was a record $83.92 billion according to the unrevised statistical figures reported concurrently with the revised figures. That tops the previous six-month record of $80.01 billion for the final half of 1985.

The unrevised figures are based on information compiled for the current statistical month rather than the revised statistical month. The bureau uses both figures because they are both estimates, subject to later revision.

Imports Up Through June

The unrevised May deficit was $14.2 billion.

Imports have risen this year over the same period last year while exports have fallen. Exports for the year-to-date totaled $108.34 billion, contrasted with $110.47 billion for the first six months of 1985.

Imports for the period came to $186.03 billion, contrasted with $179.74 billion for the same period last year.

The slack exports were particularly disappointing in light of a 30% decline in the value of the dollar against major foreign currencies since last fall.

In other reports today:

--The Labor Department reported that non-farm business productivity rose at an annual rate of 1.7% in the second quarter. Productivity had jumped at an annual rate of 3.4% the first quarter after a downturn at the end of last year.

The department said output increased 1.7% in April, May and June with no increase in hours worked. It was the first quarter since the economy began coming out of a slump in early 1983 that the number of hours worked did not rise.

--The Commerce Department reported that sales of new homes fell 9.9% in June, their third straight monthly decline.