Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 23, 1994 TAG: 9403230140
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Commerce Department, releasing for the first time a new monthly report covering trade in both goods and services, said Tuesday the deficit grew 51.8 percent to $6.30 billion. It was $4.15 billion in December.
The Clinton administration said it is concerned about the soaring deficit, which occurred entirely on the goods side of the ledger. But it drew comfort from the government's new method of calculation that highlights a U.S. surplus in export of services.
America's international fortunes are increasingly tied to exports of services such as tourism, consulting fees and royalty payments for computer software programs, officials said.
Private economists agreed that the revised system may give a more realistic picture of the nation's global standing, even though the figures on services are estimates.
``Exports of services is one of the fastest-growing areas of the U.S. economy. It is about time that the Commerce Department put this out on a monthly basis,'' said Allen Sinai of Lehman Brothers in New York City.
But, he cautioned, ``The decline across the board in exports reflects the continuing stagnation in much of the industrialized world.''
For more than a half-century, the government has reported monthly statistics that looked only at trade in merchandise. Including the service figures narrows the deficit.
But for now, the broader monthly gauge did not conceal the widening gap between what the nation sells overseas and what it buys.
Under the old accounting method, which also measured merchandise trade somewhat differently, the January goods deficit would have been $9.84 billion. That compares to a revised December deficit of $7.37 billion - the smallest trade imbalance in a year.
Using the new system, the services category rose $130 million in January to $4.73 billion - not nearly enough to offset a $2.28 billion widening of the deficit in goods, which jumped 26 percent to $11.03 billion.
The total monthly deficit, $6.30 billion, is the sum of the surplus in services and the deficit in goods.
For 1993, the United States enjoyed a surplus in services of $55.7 billion. That compared to a deficit in goods of $132.5 billion.
``The key implication of the January trade report, however, is simply that weakness in the foreign-trade sector will be a partial offset to strength in domestic demand during 1994,'' said Bruce Steinberg of Merrill Lynch.
The government said it lacked information to provide a monthly breakdown of services, country by country.
The United States continued to suffer the highest goods deficit with Japan, although the imbalance narrowed 12.9 percent in January to $4.62 billion, the smallest monthly trade gap with Japan since June.
The big drop in America's exports was blamed in part on a fall-off in shipments of commercial airlines, down $462 million, and in telecommunication equipment, down $233 million. Other exports that declined were factory engines, down $219 million, and computer accessories, down $144 million.
by CNB