U.S. Exports Remain Strong, Report Says

The nation’s foreign trade deficit remained virtually unchanged in May, the government reported Thursday, but the U.S. export boom continued virtually unabated, promising to help bolster the still-anemic economic recovery.

Commerce Department figures showed the trade deficit at $4.6 billion, a shade above the revised April figure of $4.5 billion. Imports dropped slightly to $39.9 billion from $40.1 billion in April, when growing demand for oil products pushed import volume up.

But exports remained buoyant, reaching $35.3 billion during the month, just slightly below the record $35.6 billion in April, providing new orders for American industries. High-technology products did especially well.

Analysts said that, if the trade deficit continues at the same rate for the rest of the year, it could fall as low as $62.5 billion for 1991 as a whole. Last year, the trade deficit was $101.7 billion. It has not been below $100 billion since 1983.

The deficit with Japan--long the largest chunk of the trade gap--shrank to $2.4 billion for the month, the slimmest difference since early 1984, as imports of Japanese cars dropped more than $300 million from April.

There was a surplus of $1.32 billion in trade with Western Europe in May, down from $2.11 billion in April. The deficit with Canada, the nation’s biggest trading partner, rose in May to $352 million from $289 million in April.

Bruce Steinberg, economist for the Merrill Lynch financial giant in New York, attributed much of the improvement in the trade deficit to the recent recession, which prompted Americans to cut back on their import-buying.

“As the economy recovers, imports will rise again and some trade deterioration will be unavoidable,” Steinberg said. “But markets won’t mind that much so long as it stays in a manageable range.”

Lynn Reaser, economist for First Interstate Bancorp in Los Angeles, agreed. “I don’t think the trade deficit will be a major concern to the U.S. economy if it stays under $100 million,” she said.

In a separate report Thursday, the Labor Department said the number of Americans filing new claims for unemployment benefits inched up in early July, the first rise in a month. However, analysts were not much concerned, noting that the jobless claims number can be volatile from week to week.

For the week ending July 6, 395,000 Americans filed new claims for unemployment, an increase of 7,000 from the previous week’s mark of 388,000, the Labor Department said.

Merchandise Trade Deficit

Billions of dollars, seasonally adjusted; import figures exclude shipping and insurance.

May, ‘91: 4.57

April, ‘91: 4.50

May, ‘90: 8.15

Source: Commerce Department