U.S. Trade Deficit Up to ‘Distressing’ $10.5 Billion in Nov.

The U.S. trade deficit widened in November to $10.5 billion, its worst showing in 11 months, the government reported today.

The Commerce Department said that while imports declined by $593 million to $40.69 billion, U.S. exports dropped $843 million to $30.19 billion. The trade deficit is the difference between imports and exports.

The government blamed much of the setback on the Boeing aircraft strike, which severely cut into exports of expensive commercial airliners.

Private analysts were still disheartened by the deficit figure. Many had been looking for a slight improvement after the sharp deterioration in October.

“The trade report is most distressing,” said Allen Sinai, chief economist of the Boston Co. “Even accounting for civilian aircraft, U.S. exports are going nowhere. The U.S. is simply not competitive on goods.”

The Bush Administration was more upbeat in its assessment, with Commerce Secretary Robert A. Mosbacher saying officials were still looking for “continued moderate improvement in the trade deficit” this year.

The October trade deficit totaled $10.25 billion. Both October and November resulted in the worst performance since a $10.8-billion deficit in December, 1988.

For the first 11 months of 1989, the U.S. trade deficit ran at an annual rate of $111 billion, compared to a deficit of $118.53 billion in all of 1988.

Many economists believe that America’s trade deficit will increase in 1990, reversing a two-year trend of improvements.

This is an unsettling forecast for the Bush Administration, which is counting on continued growth in exports to bolster the U.S. economy and dampen demands in Congress for protectionist trade legislation.

The 2.7% drop in U.S. exports left them at their lowest level since last March.

Almost half of all economic growth in the last two years has been supplied by a boom in export sales. But economists are worried that these strong increases are in danger of stalling out in 1990, in part because the dollar was rising in value most of last year. A stronger dollar makes U.S. goods more expensive on overseas markets.

On the import side, the 1.4% November decline represented a drop from an all-time high set the previous month. Economists said U.S. consumer demand for foreign goods is showing little sign of slackening.

As usual, the biggest trade deficit in November was with Japan, $4 billion, down from $4.9 billion in October. The deficit with members of the Organization of Petroleum Exporting Countries totaled $1.8 billion, and the deficit with Canada was $1.2 billion.

Other large deficits included $1 billion with Taiwan, $800 million with China and $700 million with Western Europe.