Trade Deficit Hits Record $169.8 Billion : Improvement in Dec. Keeps Figure From Rising Even Higher

The United States accumulated a $169.8-billion trade deficit in 1986, its largest ever, but a sharp improvement in December kept it from soaring even higher, the Commerce Department reported today.

Japan accounted for a third of the year’s shortfall.

The White House cheered the news and currency traders started buying dollars, but economists warned December’s trade deficit may be as much off the mark as last month’s estimate that the November deficit totaled $19.2 billion.

The Commerce Department today revised its November total to $15.44 billion.

Contention Validated

White House spokesman Larry Speakes said December’s $10.66-billion deficit--the best since an $8.1-billion shortfall in March, 1985--”does validate the Administration’s contention that the sharp rise in November was a fluke. I also suggest that we may have experienced a modest decline in our trade deficit in the last quarter of 1986.”

He was right by about $88 million a month, if one bases the comparison on December’s preliminary estimate and the revised deficits for the 11 previous months.

In early New York trading, the dollar surged sharply higher against all major foreign currencies in what one analyst said “could be the beginning of a change in the market’s bearish sentiment.”

‘Both Terrific Numbers’

“The December (trade) figure and the revised November figure are both terrific numbers,” the analyst said.

Speakes and several economic analysts said the trade balance should improve slightly in 1987 but still remain within $10 billion of 1986’s record $169.8-billion deficit. The old record was $148.5 billion, set in 1985.

The actual volume of trade this year will be even more in America’s favor than the merchandise trade deficit, the economist said. The latter report won’t show as much improvement, however, because the depreciating dollar will keep jacking up the price of imported goods, he said.

The December figure came about almost entirely from fewer imports.

Exports Stay Steady

The country exported $18.4 billion worth of goods last month, within $1 billion of what it has sent out of the United States every month in 1986.

Imports, however, totaled just $29.09 billion, about $3.8 billion less than the average export total during the year.

Total imports in 1986 grew 7.1% to reach $387.1 billion. Exports rose by 2% to total $217.3 billion.

Over the year, the United States ran up deficits totaling $58.6 billion with Japan, $32.7 billion with Western Europe, $23.3 billion with Canada, $15.7 billion with Taiwan, $10.7 billion with OPEC nations, $7.1 billion with South Korea, $6.4 billion with Hong Kong, $5.2 billion with Mexico, $3.5 billion with Brazil, $1.5 billion with Singapore and $900 million with India.

The Commerce Department tallies its merchandise trade figures by tracking the value of goods leaving and entering the United States.