The United States' merchandise trade deficit accelerated to $11.4 billion last month, its worst showing since September, as export sales showed their largest decline since 1978, the Commerce Department reported yesterday.
The steep 7.7 percent fall in American overseas sales overwhelmed a 1.3 percent dip in imports caused mainly by a sharp drop in purchases of petroleum products.
"This deterioration in exports took place across most of the industrial spectrum and tends to confirm a trend that has occurred over the last five months. The isolated growth in exports that occurred in January was an exception to that trend," said Jerry Jasinowski, chief economist for the National Association of Manufacturers.
February's splash of red ink was $1.2 billion higher than the January trade deficit and is running "well above the $9.3 billion average monthly shortfall during 1984's final quarter," Commerce Secretary Malcolm Baldrige said.
He had predicted a $140 billion trade deficit for the year. Last year the deficit hit a record $123.3 billion.
"Further increases in imports and higher trade deficits lie ahead," Baldrige said.
But in a luncheon speech to Women in Government Relations, Baldrige said the current "capping out" in the value of the dollar overseas, resulting from a speedup in economic growth in Western Europe, is likely to lead to improvements in the U.S. trade picture in the next 12 to 18 months, according to a Dow Jones News Service report.
The rest of the world will be "surprised at how competitive the U.S. is" when the dollar comes down, Baldrige said.
He blamed "at least half" of the trade deficit on the strong dollar, which he said is caused by the high federal budget deficit that keeps American interest rates higher than those in the rest of the world.
"U.S. exporters continue to struggle with the handicaps imposed by the strong dollar, slower growth abroad and by foreign import barriers," Baldrige said.
The strong dollar makes U.S. products cost more in overseas markets, while foreign-made goods become less expensive in this country.
Imports totaled $29.3 billion last month, reflecting sharp increases in shipments of new cars from Japan, which increased 47 percent in February to reach a total value of $1.56 billion; clothing; motor vehicle and tractor parts; and shellfish. These more than offset declines in imports of telecommunications equipment, planes and electrical machinery.
The biggest decline in imports, however, came in the value of petroleum products, which dropped 11.8 percent. An average of 4.78 million barrels a day of oil was imported in February, down from a daily average of 4.86 million barrels in January. Moreover, the average price per barrel of petroleum products dropped to $28.02 in February from $28.25 in January.
February exports dropped 8 percent from January's $19.4 billion level, to $17.9 billion. There was an even sharper decline in exports of manufactured goods, a 9.9 percent drop from January's level to $12 billion.
Among manufactured products where exports declined were planes, electrical machinery, office machines and automatic data processing equipment, cars and fertilizers. Exports of farm products such as corn, wheat, animal feeds and cotton also dropped.
Once again, the greatest U.S. trade deficit was with Japan, $4.2 billion, an increase of 15.2 percent from January's $3.7 billion deficit.
The United States also suffered a $1.9 billion trade deficit with Western Europe, a $1.8 billion trade deficit with Canada and a $1.1 billion trade deficit with Taiwan.