$15.7-Billion Trade Deficit in June Believed Worst Ever : Shortfall Called ‘Disaster,’ Major Setback to Hopes

The nation’s merchandise trade deficit soared to an apparent record $15.7 billion in June as Americans stepped up a buying spree of imported goods, the government reported today.

Economists called the June shortfall, paced by a $2-billion jump in imports despite higher prices for many foreign goods, a major setback for hopes of a long-awaited trade turnaround.

“The trade deficit was a disaster,” said David Wyss, chief financial economist for Data Resources Inc. “I still believe in the long run, we are turning around. But the silver lining is awfully hidden in this particularly dark cloud.”

The Commerce Department said the June deficit was up nearly 12% from the May shortfall of $14 billion. For the first half of 1987, the trade gap was running at an annual rate of $163.9 billion, higher than last year’s revised record deficit of $156.2 billion.

“The deficit is very large and very disappointing,” said Robert Ortner, undersecretary of commerce for economic affairs.

Undermines Reagan Effort

The new figures come while the Reagan Administration is trying to convince Congress that the nation’s trade deficit is improving under the pressure of a weaker dollar--an effort certain to be undermined by today’s trade report.

The Administration wants to soften provisions of trade legislation that is before a House-Senate conference committee. It contends that the legislation would restrain trade and invite retaliatory steps from trading partners.

Ortner said the trade debate in Congress may be one reason behind June’s disappointing figures. “Importers may feel there might be some shut-offs or some tariffs, and they’re importing more goods in anticipation,” he suggested.

The deficit reported today is the first calculated using a revised formula. Using the previous formula, the June deficit amounted to $16.32 billion, worse than the previous record $16.05 billion posted in July, 1986.

The department said the change in calculations sought to correct a previous under-reporting of exports to Canada. Department analysts said June’s figure appeared to be a record, under either the old or new accounting procedures.

Certainly Second-Worst

But they said they couldn’t tell for sure since the July, 1986, figure has not been recomputed with the Canadian adjustment. If not the worst ever, the June deficit was the second-worst on record without question.

The $2-billion June surge in imports was paced by a $1.4-billion increase in manufactured goods and a $541.7-million increase in petroleum products.

For the first six months of 1987, Americans exported $12 billion more than they did during the same period in 1986. This was one of the few bright spots in today’s report.

Once again, the United States ran its worst single-country trade deficit in June with Japan--$5.35 billion, up from $5.07 billion in May.

It ran a $2.92-billion deficit with Western Europe, up from $2.6 billion in May.