Trade Deficit Dips First Time in Five Months
The nation’s persistent trade deficit showed its first decline in five months as it narrowed slightly to $15.7 billion in August, but an unexpected dip in U.S. overseas sales clouded the improvement, the government said today.
The Commerce Department said the merchandise trade deficit, the shortfall between imports and exports, was down from the record $16.5-billion gap posted in July.
Despite the one-month improvement, acting Commerce Secretary Bruce Smart said the deficit “continues on an unacceptably high plateau,” with the United States still buying nearly twice as much as it sells.
For the first eight months of 1987, the trade deficit has been running at an annual rate of $171.1 billion. Short of a major turnaround in the months to come, the deficit appears certain to exceed last year’s record $156.2-billion shortfall.
Imports overall fell by 4.2% in August, to $35.9 billion, with America importing less from nearly all its major trading partners.
Not Conclusive
“This is an encouraging sign,” said Allen Sinai, chief economist for Shearson Lehman Brothers in New York. “The question is, will it continue? The (August) figures aren’t conclusive enough to suggest that we’re on the road to recovery in the trade deficit.”
The August import gains were partially offset by a 3.7% decline in exports, to $20.2 billion, their lowest level since February. A drop in overseas sales of U.S. commercial aircraft was blamed in part for the decline.
The export figures were a disappointment to economists who had been encouraged by a marked rise in exports in recent months, as U.S. products become more competitive from the two-year 40% decline in the value of the dollar.
“With exports at their lowest point in six months, there’s nothing to cheer us in the August trade numbers,” said Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee.
Analysts had anticipated a slight improvement in August anyway, noting that the deficit is usually larger than usual each July, partly due to a heavy influx in car imports in that month. The figures are not adjusted for seasonal fluctuations.
