The nation’s trade deficit fell sharply in September from a record high as aircraft exports surged, but sluggish economies around the world could bloat it again in coming months, a government report showed Wednesday.
The Commerce Department said the deficit fell 12% to $14.03 billion from a revised record of $15.9 billion in August. The August gap was originally reported at $16.8 billion. Exports jumped 2.3% while imports shrank 0.2%.
The September gap was well below economists’ forecasts of about $16.2 billion.
Despite the drop in September, the trade deficit remains on course for a record this year because turmoil in Asia and other regions has severely dented demand for American exports. The deficit could continue to worsen in 1999, analysts said.
“I think the trade balance will get worse next year,” said Robert Hormats, vice chairman at Goldman Sachs International in New York. Given continued weakness in many emerging economies and an expected slowdown in Europe, he said, the U.S. trade picture probably will not stabilize until late next year.
Still, the September performance may lead to stronger economic growth in the third quarter, some analysts said.
“This was a much better-than-expected trade number, especially on the exports line,” said David Blitzer, chief economist at Standard & Poor’s in New York. “At least for the moment, [this] has wiped out a whole lot of declining export activity. This is a strong plus for the overall economy.”
The smaller-than-expected deficit came as civilian aircraft exports jumped to a record $4 billion in September, a jump unlikely to recur in coming months, said Lee Price, chief economist at the Commerce Department.
Trade between Mexico and the United States grew to $15.2 billion in September, as Mexico eclipsed Japan as the nation’s second-biggest trading partner. The deficit with Mexico fell to $1.45 billion, down 18% from a record $1.76 billion in August.
Trade with Japan was $14.2 billion. The trade gap with Japan declined to $5.07 billion from $5.2 billion the month before.
Canada remained the largest U.S. trading partner with total trade flows of $28.4 billion. The deficit with Canada jumped 40% to $2.3 billion.
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The overall gap continues to reflect a deficit in the trade of goods and a surplus in services. In billions of dollars:
September: -$14.03 billion
Source: Commerce Department