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

More in Local News

NO CAPTION NECESSARY: Logo for the Cornfield Report by Jerry Cornfield. 20200112
No right turns on red gets a look, a bid to expand sports betting arrives

It’s a new week. Here’s what’s happening on Day 22 of the 2023 session of the Washington Legislature

A man was injured and a woman found dead Sunday night after an RV fire in Marysville. (Marysville Fire District)
Woman dead, man burned in Marysville RV fire

The Snohomish County Fire Marshal’s Office and Marysville Police Department were investigating the cause of the fire.

The final 747 is revealed during a celebration in Everett, Washington on Tuesday, Jan. 31, 2023. The plane was rolled out Dec. 6 from the Everett assembly factory and delivered to the customer, Atlas Air. (Annie Barker / The Herald)
‘Still jaw-dropping’: Last Boeing 747 takes the stage in Everett

Thousands, including actor John Travolta, gathered at Boeing’s Everett factory to bid goodbye to the “Queen of the Skies.”

Logo for news use, for stories regarding Washington state government — Olympia, the Legislature and state agencies. No caption necessary. 20220331
Lobbyist barred from WA Capitol after ruling he stalked representative

State Rep. Lauren Davis, D-Shoreline, obtained a domestic violence protective order against longtime lobbyist Cody Arledge.

(Lake Stevens School District)
Charges dropped for Lake Stevens teacher accused of harassing student

Prosecutors won’t pursue misdemeanor sexual assault charges against Mark Hein, who “has been absolved of wrongdoing,” his attorney said.

Karla Wislon holds a champagne glass while celebrating the closing sale of her home in Palm Springs, Ca. on May 14, 2021. (Family photo)
Former state Rep. Karla Wilson, 88, remembered as ‘smart, energetic’

Wilson served the 39th Legislative district from 1985 to 1991. She died Dec. 31.

Federal agents seized many pounds of meth and heroin, along with thousands of suspected fentanyl pills, at a 10-acre property east of Arlington in mid-December 2020. (U.S. Attorney’s Office) 20201223
Leader of Snohomish County fentanyl, meth ring gets federal prison

A search of Cesar Valdez-Sanudo’s property in Arlington unearthed kilos of drugs and hundreds of thousands of dollars.

Logo for news use featuring Whidbey Island in Island County, Washington. 220118
Port of Coupeville to make offer on Oak Harbor airport

The Port of Coupeville continues to pursue ownership of the A.J. Eisenberg Airport near Oak Harbor.

James Lewis
COVID still ‘simmering’ in the county, while booster uptake remains low

Meanwhile, flu and RSV cases have plummeted, suggesting the “tripledemic” could — emphasis on “could” — be fading.

Most Read