Trade Deficit Shrinks, Sending Positive Signal --- Merchandise Gap Narrowed In November as Imports Fell More Than Exports
WASHINGTON -- The narrowing of the U.S. merchandise trade deficit in November was one of the few positive signals sent recently by an economy widely believed to be entering a downturn.</br></br>The trade gap narrowed to $9.7 billion from a revised $10.99 billion in October, according to the Commerce Department. However, just as Iraq's invasion of Kuwait swelled the deficit late last summer by driving oil prices up, the war currently raging in the Middle East could lead to another price surge -- and thus widen the trade gap substantially -- if it lasts more than a few weeks.</br></br>The trade deficit totaled $94.95 billion from January through November, compared with $102.6 billion for the year-before period. The trade deficit for all of 1989 was $109.4 billion. The U.S. hasn't registered a deficit of less than $100 billion since 1983, when the gap was $52.4 billion.</br></br>Exports in November dropped $1.39 billion, or about 4%, but imports slid $2.68 billion, nearly 6%. Economists attributed the import drop partly to reduced consumer demand amid the economic slowdown. Exports and imports both increased in October, puzzling economists because the economic downturn apparently had begun by then. The October trade deficit originally was reported as $11.61 billion.</br></br>Despite the November drop, exports generally have been climbing slowly but steadily over the past few years, and trade-deficit figures are quite volatile on a month-to-month basis.