U.S. 2002 Deficit Hit Record $435.2B
Thu Feb 20, 9:12 AM ET
story.news.yahoo.com
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - The United States recorded a $435.2 billion trade deficit for
2002, the largest imbalance in history, as the weak global economy set
back American exports while imports of autos and other consumer goods
were hitting all-time highs.
In other economic news, the Labor Department
reported Thursday that
inflation at the wholesale level shot up by 1.6
percent in January, the biggest increase in 13
years, led by a sharp 4.8 percent rise in energy
costs.
Even though the surge was concentrated in
energy, prices of other items such as new cars
showed big advances as well and the overall
increase was certain to raise concerns about
whether inflation, which has been well-behaved
for years, was threatening to get out of control.
The government will report on January
consumer prices on Friday.
In a third report, the government said that the
number of newly laid off workers filing
unemployment claims jumped to a seven-week
high of 402,000 last week, up by 21,000 from
the previous week, showing that the labor
market is still struggling with an uneven
economic recovery.
The trade report showed that even in agricultural products, normally a U.S.
bulwark, Americans bought more imported wine, cheese and other foods
than American farmers were able to sell abroad - resulting in only the
second U.S. trade deficit in farm goods on record.
The Commerce Department reported Thursday that the
deficit for all of last year was up 21.5 percent from the $358.3 billion trade
gap recorded in 2001 and surpassed the old record deficit of $378.7 billion
set in 2000.
By country, the United States ran up the largest trade gap with China, a
deficit of $103.1 billion, marking the third straight year that the United States
has recorded its largest trade deficit with that nation. It pushed the former
front-runner in this category, Japan, into second place.
In addition to the record for all of 2002, the United States set a new monthly
high of $44.2 billion in December, up 10.5 percent from the previous record
set in November of $40.0 billion.
Opponents of President Bush trade policies contend
that the huge trade deficits represent the loss of millions of manufacturing
jobs as U.S. companies have been battered by what the critics say is unfair
competition from low-wage countries that stifle labor rights and have lax
environmental protections.
However, the administration contends that it is pursuing the correct
procedure in trying to cut global trade deals that will lower high barriers in
other countries in a way that boosts American exports.
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