Trade deficit surges to record $34 billion

Associated Press

WASHINGTON — The U.S. trade deficit ballooned to a record $34.3 billion in September as America’s already huge foreign oil bill got bigger and helped push imports to an all-time high. The deficit with China climbed to $8.7 billion, the largest ever recorded with any country.

September’s trade gap was up a sharp 15 percent from an August imbalance of $29.8 billion, the Commerce Department reported Tuesday, well above economists’ expectations for a more modest deterioration to around $31 billion.

Exports slipped from their previous month’s record as shipments of U.S. cars and auto parts dropped sharply and various other exporters from farmers to computer manufacturers suffered setbacks.

Among other negatives affecting the deficit, which covers trade in both goods and services, was payment of nearly $700 million by NBC for broadcast rights to the Olympic Games in Australia.

The Clinton administration insisted that the big jump in the deficit did not signal economic weakness and predicted that improving economies overseas will make future months look better.

"While the deficit is too high, it does not reflect problems with the underlying domestic economy," Commerce Undersecretary Robert Shapiro told reporters at a briefing on the trade figures.

Private analysts cautioned, however, that the September setback showed how far the United States has to go to narrow the huge trade gap, running at an annual rate of $360 billion, far above the previous record of $265 billion set last year.

The exploding trade deficit is the one flaw in an otherwise remarkable U.S. economic expansion, which has already produced a record 9 1/2years without a recession.

Gerald Cohen, an economist at Merrill Lynch, said the big September trade deficit will translate into a lower government estimate for overall economic growth in the July-September quarter from 2.7 percent down to around 2 percent, the slowest quarterly growth rate in more than five years.

Many private economists worry that the deficit may have reached a level that could pose a risk to the overall economy if foreigners, who have been eager to sell their products and hold dollar-denominated investments, suddenly should decide to dump their U.S. holdings and send stock and bond prices plunging.

"The inevitable question raised by huge and growing trade deficits is whether this situation represents a train wreck waiting to happen," said Ken Mayland, economist with Clear View Economics in Pepper Pike, Ohio.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Kim Skarda points at her home on a map on Thursday, June 20, 2024 in Concrete, Washington. A community called Sauk River Estates has a very steep slope above it. There is a DNR-approved timber sale that boarders the estate properties, yet they were not consulted about the sale before approval. The community has already appealed the sale and has hired their own geologist to conduct a slope stability report at the site. (Annie Barker / The Herald)
Beneath steep slope, Concrete neighbors fear landslides from logging above

Nielsen Brothers plans to cut 54 acres of timber directly behind the community of 83 homes. Locals said they were never consulted.

Law enforcement respond to a person hit by a train near the Port of Everett Mount Baker Terminal on Thursday, June 27, 2024 in Mukilteo, Washington. (Annie Barker / The Herald)
2 killed in waterfront train crashes were near Mukilteo ‘quiet zone’

In June, two people were hit by trains on separate days near Mukilteo Boulevard. “These situations are incredibly tragic,” Everett’s mayor said.

Rob Plotnikoff takes a measurement as a part of the county's State of Our Waters survey at Tambark Creek in Bothell, Washington on Monday, July 1, 2024. (Annie Barker / The Herald)
Snohomish County stream team bushwhacks a path to healthier waterways

This summer, the crew of three will survey 40 sites for the State of Our Waters program. It’s science in locals’ backyards.

Logo for news use featuring the municipality of Mountlake Terrace in Snohomish County, Washington. 220118
4th suspect arrested after Mountlake Terrace home robbery

Police arrested Taievion Rogers, 19, on Tuesday. Prosecutors charged his three alleged accomplices in April.

A 10 acre parcel off of Highway 99, between 240th and 242nd Street Southwest that the city of Edmonds is currently in the process of acquiring on Monday, July 10, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds ditches $37M Landmark public park project off Highway 99

The previous mayor envisioned parks and more in south Edmonds, in a historically neglected area. The new administration is battling budget woes.

Edmonds school official sworn in as Mount Vernon supe

Victor Vergara took his oath of office last week. He was assistant superintendent of equity and student success in Edmonds.

Everett
Everett courthouse garage briefly closed for ‘suspicious package’ report

A man drove his car into the Snohomish County Courthouse garage and reported he believed the package was in his car.

High-capacity magazines at The Freedom Shoppe gun store, which was holding a sale in anticipation of new gun control measures, in New Milford, Conn., April 2, 2013. The store is liquidating their stock of weapons expected to be banned. Months after the massacre of 26 people at a school in Newtown, Conn., legislative leaders in the state on Monday announced what they called the most far-reaching gun-legislation package in the country. (Wendy Carlson/The New York Times)
WA high court leaves ban in place for now on high-capacity ammo magazines

Monday’s decision will keep the law in effect until the court hears arguments, possibly this fall, on the bill sponsored by an Edmonds senator.

Firefighters respond to a 911 call Tuesday morning in Mill Creek. (Photo provided by South County Fire)
Mill Creek house fire displaces 3

Firefighters responded to a house fire in the 14100 block of 30th Avenue SE early Tuesday morning. No one was injured.

Alyvia Nguyen, 8, climbs on leaf shaped steps at the new Corcoran Memorial Park playground on Friday, July 12, 2024 in Bothell, Washington. (Olivia Vanni / The Herald)
New Bothell-area park ‘could not be a more fitting dedication’

In 2019, Jim Corcoran donated $1.5 million worth of land to become a public park. He died before he could see it completed.

Cars line up for the Edmonds ferry in Edmonds, Washington on Thursday, Dec. 7, 2023.  (Annie Barker / The Herald)
Ferry line jumpers face a $145 fine — and scorn from other drivers

Law enforcement is on the lookout for line cutters. It’s a “hot-button issue that can lead to something worse.”

Mother charged in Stanwood toddler’s fentanyl overdose death

Morgan Bassett woke up in January 2022 and found her daughter wasn’t breathing. Last week, she was charged with manslaughter.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.