U.S. Trade Gap a Record in ’99

American consumers’ buying spree of foreign goods from TVs to cars last year led to an immense increase in the trade deficit--up more than 50% from the previous year to a record high of $338.9 billion.

The deficit in the “current account,” which measures not only trade in goods and services but also investment flows and foreign aid payments, grew by 53.7% from the previous record, a $220.6-billion imbalance in 1998, the Commerce Department said Wednesday.

The hefty $118.4-billion deterioration in the current account deficit is the one bit of tarnish on an otherwise sterling,record-breaking U.S. economy, which celebrated its ninth year of uninterrupted growth in March.

In the fourth quarter, the current account deficit grew to $99.8 billion after widening to $89.1 billion in the third quarter.

Though all categories measured showed deterioration in 1999, the deficit in goods widened the most--by $100.2 billion to $347.1 billion--as U.S. consumers snapped up TVs, cars and other merchandise flowing in from foreign producers.

With plentiful jobs, rising incomes, low inflation and stock market gains, Americans feel wealthy and in the buying mood, economists said.

“U.S. consumers have a strong appetite for everything,” said Gerald Cohen, economist at Merrill Lynch.

And the appetite remains healthy. The Port of Los Angeles said Wednesday it saw a 25% rise in the number of inbound cargo containers in February from a year earlier. Exports also increased.

And, though America enjoyed surpluses in the services category, in 1999 the surplus shrank to $79.6 billion from $82.7 billion in 1998.

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U.S. Trade Deficit

The overall gap continues to reflect a deficit in the trade of goods and a surplus in services. Quarterly balance in billions of dollars:

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4th Quarter: --$99.8 billion

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Source: Commerce Department