Record Exports Cut Trade Gap For 1st Quarter --- Machine Sales Helped Slice Deficit to $35.95 Billion; Imports Also Set Mark
WASHINGTON -- Strong machinery exports helped reduce the nation's merchandise trade deficit, measured on a balance of payments basis, to $35.95 billion in the first quarter, the Commerce Department said.</br></br>The level of exports and imports both set records, but exports expanded at a much faster rate. The fourth-quarter gap was revised to $41.19 billion; it was previously put at $40.17 billion.</br></br>Among exports, industrial supplies also posted a big increase in the first quarter. Farm shipments hit their highest mark since the fourth quarter of 1984, thanks partly to strong wheat shipments to the Soviet Union. Overall, exports increased 9.8% to $74.67 billion in the latest quarter from $68.01 billion in the previous period.</br></br>U.S. exports have benefited from the dollar's decline in foreign currency trading over the past three years. A lower dollar makes imports more expensive and U.S. products more competitive overseas.</br></br>Imports increased 1.3% to $110.62 billion from $109.21 billion. The figures benefited from an 11.6% drop in imports of petroleum and related products. The decline was due to lower prices, as shipments rose. Big increases came in nonelectrical machinery and passenger cars from Canada and South Korea. Auto imports from Japan and West Germany fell.