Merchandise Trade Deficit Hits Record $147.71 Billion in 1986

The U.S. merchandise trade balance of payments deficit hit a record $38.37 billion in the last quarter of 1986, pushing the year’s deficit to an unprecedented $147.71 billion, the Commerce Department said today.

The balance of payments figure is essentially the same as the previously reported merchandise trade deficit, but it also includes imports and exports of gold and adjustments in U.S. trade with Canada.

The final factor in determining America’s real trade deficit in 1986--the value of its services--will not be reported until next Tuesday.

Today’s otherwise gloomy report contained one encouraging item: The volume of imports fell by 1% as the price of imports increased 4%. The shifts are first fruits in the government’s effort since September, 1985, to drive down the dollar’s value, thus making U.S. goods more competitively priced and foreign products more expensive.

The fourth-quarter balance of payments deficit of $38.37 billion tops the old record of $37.35 billion, set in the fourth quarter of 1985. The 1986 total of $147.71 billion also broke the old record of $123.62 billion set in 1985.

Imports increased $2.8 billion during the last quarter, or 3%, to total $95.7 billion, the Commerce Department said. Exports increased $1.6 billion, also 3%, to $57.3 billion.