U.S. Trade Deficit Surges, Making 1986 Worst Year : Hopes for Reversal Are Dashed

The nation’s trade deficit surged to a record $19.2 billion in November, reversing a three-month improvement trend and making 1986 by far the worst year ever for the nation’s trade accounts, the government said today.

The Commerce Department report appeared to dash expectations of many economists that a turnaround in trade was taking place.

For the first 11 months of 1986, Americans imported $159.1 billion more than they exported--already surpassing the record $148.5-billion shortfall for all of 1985.

The 1986 deficit is running at an annual rate of $173.6 billion, government analysts said.

‘Horrendous’ Report

Robert Ortner, Commerce Department undersecretary for economic affairs, called the trade report “horrendous.”

He suggested that changes in U.S. tax laws that will eliminate the deductibility of sales taxes on Jan. 1 might have had some bearing on the end-of-year surge of import spending.

Still, Ortner said, “Nobody is going to put a happy face on it.”

The staggering deficit--the highest ever recorded for a single month--resulted from a sharp increase in imports, which rose to a record $37.8 billion from $31.4 billion the previous month.

Exports, meanwhile, after rising in September and October, fell to $18.6 billion in November from the October level of $19.3 billion.

The November deficit was high even by recent standards: It compares to an average monthly deficit of $14 billion during the preceding 10 months. The previous record had been an $18-billion shortfall in July.

Japanese Cars

The report showed a sharp increase in imports of autos, especially from Japan.

The $19.2-billion trade deterioration in November compares to a $12.1-billion shortfall in October, a $12.6-billion deficit in September and a $13.3-billion deficit in August.

Analysts had expected recent declines in the value of the U.S. dollar against other major currencies to have had more impact on trade accounts.

But, rather than decreasing, imports have been increasing all through 1986 even though a weaker dollar in theory makes them more expensive to U.S. consumers.

Farm trade was one of the few areas showing a surplus. In November, Americans exported $484 million more in farm products than they imported.

Oil Products Up

Oil and petroleum product imports increased to $3 billion in November from $2.7 billion in the month before.

The deficit with Japan alone rose to $6.7 billion in November, making it the largest monthly deficit ever posted by the United States with a single trading partner. It was up from a $5-billion October deficit with Japan.

The nation’s trade deficit has been growing steadily since 1981, sharply increasing unemployment in import-battered manufacturing industries and sending a flood of dollars out of the country.

The bleak figures seemed certain to boost support for major trade legislation in the new Congress, and to make it harder for the Administration to head off legislation that it deems protectionist.

Six-year Trend

Incoming Senate Majority Leader Robert C. Byrd (D-W.Va.) said the November result “simply continues a six-year trend of exploding imports and shrinking exports,” and called on the Adminis1953653108legislation.”