Merchandise Trade Deficit Hits 31?2-Year Low: Trade Deficit Declines ...
Declines in a wide range of imports pushed the nationÛªs merchandise trade deficit down in July to the lowest level in 3Û÷/2 years, $8.1 billion, the Commerce Department reported yesterday.</br></br>The report of the $3.6 billion decline was hailed by the Reagan administration and appeared likely to give a boost to the presidential campaign of Vice President George Bush. Bush has been trying to turn aside criticism from his Democratic opponent, Massachusetts Gov. Michael Dukakis, that the large continuing trade deficit represents a major failure of the administration's economic policies.</br></br>ÛÏThis is great news,Û Commerce Secretary C. William Verity said in a statement. ÛÏCompared with the same seven months of last year, exports surged 28 percent while imports rose less than 10 percent. With exports still increasing and imports leveling off, we see favorable trends continuing.Û</br></br>Many analysts had been looking for a larger deficit, but the market reaction to the low figure was moderate. Only a few months ago, large changes in the monthly trade number regular- ly sparked big market reaction, such as a 100-point drop in the Dow Jones average for 30 industrial stocks last winter after a $3 billion rise in the trade deficit.</br></br>Yesterday, the industrial average closed at 2100.64, up 17.60 points, after a day of seesawing. Yields on long-term government bonds fell from 8.99 percent to 8.94 percent. The dollar rose sharply on international currency markets as analysts