‘89 Trade Deficit is $113.2 billion, lowest since ’84

The U.S. trade deficit narrowed to $113.2 billion last year, the smallest since 1984, despite the highest level of foreign oil imports in 10 years, the government reported Tuesday.

The Commerce Department said the deficit shrank by 11% from an imbalance of $127.2 billion in 1988, reflecting continued growth in American exports, especially manufactured goods and agricultural products.

The 13.4% increase in exports, which rose to a record $361.9 billion, more than offset a 6.4% gain in imports, which also hit an all-time high of $475.1 billion.

Tuesday’s report on merchandise trade as calculated on a balance of payments basis confirmed trends already noted in the department’s monthly merchandise trade reports, which showed a deficit for all of 1989 of $108.6 billion.

The new figure is higher because it excludes military sales by the U.S. government and makes other minor adjustments in the monthly figures.

For the fourth quarter, the trade deficit posted an increase of 0.9% to $28.8 billion, following a deficit of $28.6 billion in the third quarter.

A higher trade deficit would spell trouble for the Bush Administration, which is counting on further export growth to prop up the U.S. economy.