Trade Deficit Grew 4.3% in November : Economy: Analysts had expected a drop. Many experts see the widening gap as a reflection of U.S. strength.

The U.S. Commerce Department on Thursday reported a surprising jump in the trade deficit during November as an expanding domestic economy soaked up record volumes of imports even as the nation’s exports continue to thrive.

In November, U.S. imports of goods and services exceeded exports by $10.53 billion, a 4.3% increase from October’s deficit. That surprised many analysts, who had expected the deficit to fall.

As a result, the Commerce Department said the trade deficit for 1994 would probably reach a record high of $152.5 billion, surpassing the record $152.1 billion recorded in 1987.

The growing trade deficit--a widely watched and often politically sensitive economic indicator--is regarded by many economists as a reflection of domestic economic strength, not weakness.

“The strength of the U.S. economy was the primary force behind the increase in the deficit, rather than a loss in our ability to be competitive in export markets,” said Lynn Reaser, chief economist at First Interstate Bank in Los Angeles.

She also noted that the United States continues to run a surplus on services such as transportation and tourism that are a fast-growing part of the global economy. In November, the surplus on services rose to $5.03 billion from $4.95 billion in October. The goods deficit grew to $15.56 billion from $15.05 billion in October.

The growing U.S. trade deficit also reflects the fact that the domestic economy is much more robust and better able to absorb imported goods than many of its slower-growing trading partners such as Japan and Western Europe.

The deficit with Western Europe, for example, rose to $1.96 billion in November from $1.5 billion in October. The gap with Canada--the United States’ single largest trading partner--also widened to $2.02 billion in November.

Although the deficit with Japan shrank in November by 7% to $6.2 billion, the gap through the first 11 months of the year has swelled to $60.1 billion. That’s larger than the entire deficit for all of 1993, and it is certain to aggravate tensions between the two countries over longstanding charges that the Japanese unfairly restrict imports.

Yet the growing U.S. trade deficit was only part of the story. U.S. exports, a key indicator of the nation’s economic health, reached a record $61.2 billion in November, and the pace of growth has been picking up steadily, economists said.

First Interstate’s Reaser said U.S. exports will begin growing faster than imports within two years as the domestic economy’s growth moderates and other foreign economies take off. The North American Free Trade Agreement with Mexico and Canada as well as the global General Agreement on Tariffs and Trade should also boost exports by removing trade barriers, she said.

“Our trade barriers are much lower than those in other countries,” Reaser said, “so we have more to gain by the breaking down of these barriers.”

Booming exports should also benefit California, whose products and, even more so, its services--such as engineering, computer software and entertainment--are in demand abroad, said Joseph Wahed, chief economist at Wells Fargo Bank.

“Every time Madonna goes to Rome or Taipei to sing and dance, she brings money back with her,” he said.

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Times wire services contributed to this story.

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U.S. Trade Deficit

Overall deficit in goods and services, in billions of dollars:

Nov. 1994: $10.53

Source: Commerce Department