yeeehaaa.. let's buy the dollar -s-
U.S. Trade Gap Widens in October to Record $25.9 Billion
By Vincent Del Giudice
U.S. Trade Gap Widens in October to Record $25.9 Billion
Washington, Dec. 16 (Bloomberg) -- The U.S. international
trade deficit in goods and services widened in October to a record
as imports accelerated and exports declined, the Commerce
Department said today.
The shortfall grew to $25.9 billion for October from $24.2
billion during September, previously reported as $24.4 billion.
Analysts had expected the October trade gap to hold at $24.4
billion.
The merchandise deficit with Japan widened to a record $7.2
billion in October. The deficit with China set a record as well,
growing also to $7.2 billion.
Importers ''are scrambling to meet demand,'' said Astrid
Adolfson, an economist at MCM MoneyWatch in New York, before the
report. ''Consumers have the wherewithal to spend. Shippers say
demand hasn't dropped one iota. In fact, it could be picking
up.''
Imports rose 1.6 percent to a record $107.9 billion in
October, the 10th consecutive month without a decline in shipments
from abroad. The October import gain was led by computers and
consumer goods. The average price of oil was also higher.
Exports of goods and services fell 0.1 percent to $81.9
billion in October, reflecting weaker demand for
telecommunications equipment and consumer products.
Through October, the deficit totaled $218.4 billion. That's
up from $135.4 billion during the first 10 months of last year. At
that pace the trade shortfall for all of 1999 will top last year's
record of $164.3 billion -- and total about $262 billion.
The October gap, the government's first look at global
commerce in the final three months of 1999, could ''delete
substantially from fourth-quarter growth'' as imports subtract
from domestic production,'' said William Sullivan, an economist at
Morgan Stanley Dean Witter in New York, before the report.
For the quarter ended Sept. 30, the combined trade shortfall
in goods, services and investments widened to a record, as imports
grew faster than exports and overseas investors earned more on
their U.S. holdings, the Commerce Department said Tuesday.
The current account deficit, the broadest measure of
international trade because it incorporates financial
transactions, grew to $89.9 billion in the three months from July
through September. The current account shortfall is on track to
surpass the record $225.6 billion set last year.
Oil Imports
Higher oil prices and rising consumer demand for imported
goods have caused the trade gap to widen this year. The U.S.
imports more than half its oil, and depends on other countries for
electronics, apparel and toys.
The trade deficit with the Organization of Petroleum
Exporting Countries narrowed to $2.7 billion in October from $3
billion in September, although that's higher than the October 1998
shortfall of $836 million -- and shows much petroleum costs have
risen in the past year.
Crude oil climbed yesterday to a three-week high after an
industry report said U.S. fuel inventories dropped. The American
Petroleum Institute said crude oil supplies fell 7.16 million
barrels, or 2.4 percent, to 294.4 million, the lowest level since
January 1997. Analysts expected declines of less than half as
much. The drop came as Iraq, which pumps about 3 percent of the
world's oil, halted exports on Nov. 24.
In the October trade report, the price of a barrel of crude
oil averaged $20.74, the highest since January 1997.
Auto Imports
Among other major industries, auto imports fell, even as
Toyota Motor Corp., Volkswagen AG and other overseas automakers
won more of the U.S. auto market from Detroit rivals.
Moreover, demand for Toyota pickups, VW Jettas and other
models has helped drive the industry to a record year. Asian
companies have captured 25.7 percent of the U.S. market so far
this year, while European makers hold 5.7 percent.
The overseas makers also have been striking at the heart of
Detroit's most profitable models -- pickups, sport utilities and
minivans. They grabbed 20.9 percent of the light truck market in
November, up 4.3 points from the year-ago month, helped by
Toyota's Tundra pickup and Honda Motor Co.'s Odyssey minivan.
Aircraft Competition
Aircraft exports rose while aircraft imports fell, as Seattle-
based Boeing Co. and Airbus Industrie, based in France, fight for
business in the U.S. and elsewhere.
Boeing on Tuesday said it won a firm order for 15 more short-
range 717 jetliners from Pembroke Capital Ltd., an Irish aircraft-
leasing company, which already has ordered 10. Boeing now has a
firm order from Pembroke for 25 of the 106-seat planes and options
for 25 more. In October, Boeing delivered 16 jetliners to foreign-
based customers, up from only two to Uzbekistan Airlines during
September, according to the company's statistics.
Still, Airbus recently said its order backlog exceeded
Boeing's for the first time, marking a milestone in the European
planemaker's effort to grab an equal share of the market from the
world's biggest aircraft maker.
Japan
The merchandise trade deficit with Japan of $7.2 billion in
October follows a gap of $6.6 billion during September and $6
billion in October 1998.
On Dec. 9, Treasury Secretary Lawrence Summers on Japan's
economy told reporters improvement in Japan's economy ''has been
some combination'' of growth in domestic demand and exports.
However, ''It will be important over time for the emphasis to
shift to domestic demand-led growth,'' Summers said.
Japan continues to face ''long-run fiscal issues,'' and
''It's appropriate that Japan use all of the tools'' to boost its
growth and sustain fiscal discipline, Summers said.
China
The October trade deficit of $7.2 billion with China follows
a gap of $6.9 billion during September and $5.5 billion in October
1998.
The deficit with China is a sore point. U.S. labor officials,
saying they are ''energized'' by their part in thwarting recent
World Trade Organization talks in Seattle, are vowing to try and
block a U.S. accord that would endorse China's joining the WTO.
China agreed to open everything from its telecommunications
to its film markets. In turn, it must be granted permanent
''normal trade relations'' with the U.S., instead of facing an
annual vote in Congress as it does now, because WTO rules require
that no nation's membership have conditions attached.
Still, some lawmakers say a full-throttle union campaign
could make it difficult for them to vote in favor of China.
Elsewhere in October, the deficit with Asia's newly
industrialized countries narrowed to $2.3 billion. The gap with
Canada, the largest U.S. trading partner, grew to $3.2 billion.
The deficit with Mexico shrank to $1.4 billion. The shortfall
with Western Europe widened to $5 billion.
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