Exports Reach Record High in September : Economy: Overall U.S. trade deficit drops slightly, while that with Japan is lowest in two years. Jobless claim figures rise.
The United States’ exports climbed in September to a record level, and the trade deficit with Japan fell for the sixth month in a row to its lowest level in two years, the Commerce Department announced Wednesday.
As a consequence, the overall U.S. monthly trade deficit, riding a wave of foreign sales of U.S.-made autos and auto parts, dropped slightly from $8.36 billion in August to $8.35 billion in September but was down sharply from the record $11.3 billion recorded for June.
“The trade deficit appears to have peaked in the second quarter, and there are signs of continued improvement in the months ahead,” Commerce Secretary Ronald H. Brown said.
In a separate report, the Labor Department said that the number of Americans filing new claims for unemployment benefits edged up to 371,000 last week from 370,000 the previous week. Both figures, however, are down from the level of 381,000 for the week ended Nov. 4.
In another report, the Commerce Department said business inventories rose 0.3% in September, the 18th straight increase but a smaller one than for the previous two months. The advance was in line with analysts’ expectations, and it suggests an economy growing at a modest pace.
The strong trade numbers notwithstanding, the U.S. Chamber of Commerce chastised both Congress and the Clinton Administration for not doing better. The Chamber said a continuing impasse on renewed authority to negotiate a trade pact--in this case the inclusion of Chile in the North American Free Trade Agreement--was leading to “missed opportunities” to increase sales in South America.
U.S. Trade Representative Mickey Kantor, who spoke in a conference call with reporters as he was driving to a family Thanksgiving event Wednesday, focused on the increase in exports and the narrowing gap in trade with Japan. A widening deficit with Canada and Mexico, he said, is linked not to NAFTA but to the falling value of the Mexican peso and the Canadian dollar. “That has made a huge difference,” Kantor said.
He said trade with Mexico “has begun to stabilize” but that “we will continue to have a trade deficit with Mexico as long as the peso remains weak.”
The deficit with Mexico for September was $1.3 billion, up from $1.1 billion for August. With Canada, it was $1.9 billion, up from the $1.5 billion-deficit of the previous month.
With Japan, the deficit was $4.3 billion, down from $5.1 billion in August. It was $3.6 billion with China, down from $3.9 billion.
Overall, U.S. exports of goods and services reached $67.2 billion in September, their highest level ever. In August, the figure was $66.2 billion.
Government figures also showed that in the manufacturing sector, imports exceeded exports by $15.9 billion in September, a slight improvement over August’s deficit of $17.1 billion. The 1995 yearlong figure may approach $190 billion, a wide increase over the 1994 record of nearly $156 billion, and nearly three times as high as it was when the Clinton Administration took office.
One of the bright lights involved the automotive business, in which foreign sales of U.S.-made products reached a record $5.61 billion, a monthly increase of $346 million. But foreign sales of U.S. civilian aircraft tumbled $455 million to $615 million.
In the high-tech arena, a surplus of $700 million in August disappeared, and in the semiconductor sector, the United States imported $3.6 billion worth of products, overwhelming the $3.1 billion in exports.
The semiconductor trade is likely to become a point of contention in coming months as the United States and Japan, looking at each other cautiously, turn to renegotiating an agreement governing Japan’s imports of semiconductors.
Under the pact, foreign companies’ share of the Japanese semiconductor market has grown over the past decade from roughly 8% to 20%, and the now-growing deficit in U.S. sales is likely to place added pressure on Tokyo to renew the pact, a course it has been reluctant to follow.
“We should . . . renew it in light of the current situation,” Kantor said.
Charles W. McMillion, who operates an economics consulting firm in Washington, predicted that losses in semiconductor trade in 1995 may exceed $4.4 billion. Merchandise exports in general, he said, are “stagnant as inventories build up and customers aren’t buying.”
Pointing to what he called a big dichotomy, he said that foreign sales of U.S. agriculture products and chemicals “are doing very well, but manufacturing is getting hammered.”
“The trade figures are changing rapidly,” McMillion said, “and it’s the high-tech and manufacturing sectors that are taking it in the shorts, and the commodities and oddly defined services that are improving.”
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U.S. Trade Deficit
Overall deficit in goods and services, in billions of dollars:
(See newspaper for chart)
September 1995: -$8.35
Source: Commerce Department