
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, September 13, 1995                   TAG: 9509130039
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

TRADE DEFICIT HITS PEAK IN WAKE OF MEXICO CRISIS

The United States suffered its worst trade performance in history as the depressed Mexican economy cut into U.S. exports and Americans' appetite for foreign oil, cars and electronic products continued unabated.

The Commerce Department said the deficit in America's current account jumped to $43.62 billion in the April-June quarter from the first-quarter deficit of $39.03 billion.

The current account is the broadest measure of U.S. trade covering merchandise, services and investment flows.

The deficit in merchandise hit a record $49.04 billion in the spring quarter as U.S. demand for imports rose by $8.5 billion, fueled by rising purchases of oil, autos, computers and other consumer goods. American exports were up as well, but the increase was a smaller $4.5 billion.

Analysts said American producers were hurt by economic weakness in many of America's prime export markets. Mexico, which had been the third biggest market for U.S. exports, was struggling with the fallout from its currency crisis. And other prime export markets such as Canada, Japan and Europe were also coping with weaker economies.

``The world economy has slipped in 1995. The weakness in U.S. exports stems largely from the financial shock to Mexico,'' said Allen Sinai, chief global economist at Lehman Brothers in New York.

Analysts predicted the deficit in the current account would hit a record $165 billion this year, surpassing the old mark of $151.98 billion set in 1987. But they said improving economic fortunes around the globe should spur U.S. exports and begin narrowing the deficit next year.

In addition to the $49.04 billion deficit in merchandise, the United States suffered a $2.87 billion deficit in investment and a $7.38 billion deficit in unilateral transfer payments, which include foreign aid.

by CNB