Trade Deficit Inches Up to $12.4 Billion

The nation’s trade deficit widened slightly in January to $12.4 billion after two months of sharp improvements, the Commerce Department said today.

The excess of imports over exports was up from the $12.2-billion deficit in December.

Exports, which had propelled improvement in November and December, fell by 10% in January to $22.3 billion.

The Reagan Administration said the figures are better than they appear at first glance.

“There was a seasonal decline in exports, which have dropped in January every year of this decade,” Commerce Secretary C. William Verity said in a statement. Overall, he said, the figures “confirm the improving trend” of the last few months.

‘On the Right Track’

“There is obviously a long way to go to eliminate the trade deficit. But we are on the right track,” Verity said.

Private analysts generally agreed that the January figures should not be read as an indication of a worsening trade balance--and noted that January’s figure, although higher than December, was an improvement from both the $13.2-billion November deficit and the record $17.6-billion October shortfall.

Analysts had expected a deterioration of the trade balance in January, noting that exports are traditionally down in that month.

However, imports also fell in January, by 6% to $34.8 billion.

Thus, the deficit for the month--eagerly followed by financial markets--was somewhat better than most analysts had expected.

Exports had increased 9.4% in November and 4.2% in December to record levels.

Overall Deficit Shrinking

Analysts claim that the overall trade deficit is shrinking, but that improvements will be agonizingly slow with many setbacks along the way--like January’s.

The deficit with Japan--the country with which this nation runs its largest deficit--fell by 17.6% in January to $3.9 billion, the lowest one-month level since December, 1986.

One major category of imports from Japan--new automobiles--registered a 19.5% drop in January, to $1.6 billion.

And the nation even showed its first surplus in nearly three years with Britain in January, exporting $75 million more in goods than it imported.

Despite the drop in January exports, manufacturing industry leaders have said that recent gains in exports point to a genuine boom, due in large part to a weaker dollar--now worth just half its value of three years ago against other key currencies.

A weaker dollar makes U.S. goods cheaper abroad and foreign products more expensive at home.