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To: long-gone who wrote (30286)	3/18/1999 10:46:00 AM
From: Gord Bolton	Respond to of 116796

FOCUS-U.S. January trade deficit soars in January 9.44 a.m. ET (1444 GMT) March 18, 1999 WASHINGTON — The U.S. trade deficit jumped unexpectedly in January to a record $16.99 billion as imports of steel and other goods from China surged and exports of U.S. goods dropped, the government said Thursday. The January deficit, fueled by a record deficit in manufactured goods, caught Wall Street by surprise. Analysts said it was a sign that U.S. economic growth was slowing in the first part of the year after a robust expansion at the end of 1998. "It's going to set the stage for some very substantial . .. trade losses in the first quarter, which should help slow GDP (Gross Domestic Product) down significantly,'' Greg Mount, an economist at Bank One in Chicago, told Reuters Television. U.S. bond prices firmed after the release of the trade report and a Labor Department report that showed scant consumer price inflation. The Consumer Price Index was up a tiny 0.1 percent in January bringing the 12-month gain in the CPI to a modest 1.6 percent. Investors have been concerned that continued rapid growth in the U.S. economy could fuel inflation and prompt the Federal Reserve to raise official interest rates to slow the economy. Wall Street analysts had been expecting a January trade gap of $14.9 billion after a December deficit of $14.05 billion. The U.S. deficit in trade of manufactured goods soared to a record $23.42 billion in January after marking a $20.5 billion gap in December. Higher imports of computers and other capital good rose along with consumer goods were behind the surge. Meanwhile U.S. exports of industrial materials and farm goods fell, the department said. The big jump in the January trade gap, after a record $170 billion deficit for all of 1998, could fan protectionists pressures in Congress. On Thursday the U.S. House passed a bill that would slap quotas on imports of foreign steel, which workers and companies say has been damaging the domestic industry and causing layoffs. Lawmakers are also likely to take a hard look at the growing gap with China -- and the fact that it replaced Japan in January as the source of the biggest trade deficit -- when it considers renewing China's trade status with the United States in the next few months. The deficit with China rose to $4.88 billion from $3.98 billion in December, the department said. Steel imports from China jumped by 65 percent to 98,508 metric tons from 59,831 tons in December, it said. Steel workers who have been lobbying Congress for broad import curbs said supplies from China have been growing as the threat of steep antidumping duties reduced imports from Japan, Brazil and Russia. U.S. exports to China fell in January to $779 million from $1.35 billion in December. Imports rose to $5.67 billion in January from $5.33 in December, the department said. The U.S. trade gap with Japan fell in January to $4.66 billion from $5.88 billion, the department said. Both imports and exports to and from Japan fell, it said. Deficits with U.S. North American Free Trade Agreement (NAFTA) partners also rose. The deficit with Canada rose to $2.71 billion, the highest since November 1986, from $2.18 billion in December, the Department said. The trade deficit with Mexico rose to $1.43 billion from $1.26 billion, the department said. The deficit with the European Union fell to $1.12 billion in January from $3.24 billion in December. It was the lowest deficit with the EU since February 1998, the department said.