Trade Gap Shrank Sharply in November, Stocks, Bonds, Dollar Rally on the News --- Narrower Deficit Indicates An Improving Picture, But Analysts Are Wary
WASHINGTON -- The government's report that the merchandise-trade deficit narrowed to $13.22 billion in November indicates that the improving trade picture is finally starting to be reflected in the monthly figures.</br></br>The deficit for 1987 is still likely to set a record of more than $170 billion, however, and analysts cautioned against expecting further substantial gains in coming months.</br></br>But the November gap was much smaller than October's record $17.63 billion, which rocked financial markets, sending the dollar plunging against foreign currencies. Government and private economists have insisted that the underlying U.S. trade outlook was brightening, largely in response to the dollar's drop over the past three years. But until the latest report, little improvement has been apparent in the volatile monthly figures, which aren't adjusted for seasonal variation or inflation.</br></br>The November deficit was the smallest since a $12.96 billion gap in April. While imports fell, a broad-based surge in shipments pushed exports to a monthly record, and the nation's bilateral balance narrowed with Canada, Japan and Western Europe.</br></br>"I think it looks fabulous," said Charles Lieberman, senior vice president at Manufacturers Hanover Securities Corp. in New York, pointing especially to the strong growth in exports. "These are great numbers, though I'm not anxious to get carried away by a single month."