After one month of decline, the U.S. trade deficit continued its upward march in September, reaching a near-record $24.4 billion, the Commerce Department reported yesterday. Lower exports and higher imports both contributed to the rise.
The August figure, $23.5 billion on a revised basis, was down from the July total and caused a few economists to wonder if the deficits had peaked. Others, however, saw August as an anomaly caused mainly by Boeing Co.'s sale of an unusual number of airliners overseas that month.
The September figures show the predicted drop in aircraft sales--close to $1 billion less--as well as lower sales of car parts and engines and finished vehicles. The numbers also showed a rise in imports, notably in industrial supplies but in consumer goods as well.
Reflecting the gap between the value of what the United States sells to and buys from the world, the deficit has roughly doubled in the last two years. The main causes: A strong U.S. economy and strong dollar has sucked in foreign products, but financial crisis in East Asia and Latin America has toned down demand there for U.S. products.
Economists disagree over the long-term implications of deficits. Some see them as a sign that the country is living dangerously beyond its means; others say they mean high standards of living in the United States as people buy foreign goods and can be sustained more or less indefinitely. Generally speaking, politicians favor lower deficits.
With the U.S. economy continuing to hum along and unemployment holding at low levels, the deficits have yet to become a major political issue, though some White House critics, notably Reform Party presidential candidate Patrick J. Buchanan, are attempting to make them one.
The National Association of Manufacturers predicted yesterday that the deficit will continue to grow for the next few months. One reason, according to association economist Gordon Richards: Year 2000 computer problems may delay recovery in foreign countries, inhibiting their demand for U.S. goods.
James Glassman, senior U.S. economist at Chase Securities Inc., suggested that a sustained turnaround in the figures won't come until about this time next year. "Our trading partners over there in Asia have been in a deep recession," he said, "and as that recovery gathers momentum I think we'll see a lot better improvement."
The United States' deficit with China remained roughly steady at $6.9 billion, a figure that ranked as the largest of any single country. U.S. exports to China grew by $200 million, due primarily to increased sales of transport equipment, while imports increased by a like amount, primarily in toys, games and sporting goods.
Earlier this week, the United States reached a market-opening deal with China by which Washington will support the country's entry into the World Trade Organization. U.S. officials hope that over time the new access to the Chinese market will change the trade figures appreciably.
Japan's share of the deficit, meanwhile, was $6.6 billion, up from $6.4 billion. Western Europe's decreased to $3.5 billion from $4.4 billion.