The dark cloud of the expanding U.S. trade deficit is once again passing over the sun of the booming economy and casting a shadow some fear could stir up some trouble.
The Commerce Department says a decline in exports combined in September with a boom in imports and a rise in the price of oil to produce a whopping $34.3 billion dollar deficit with America's trading partners, especially China, Canada and Mexico.
That's up 15 percent from an August imbalance of $29.8 billion, well above economists' expectations. It also easily surpasses the old record of a $31.7 billion imbalance set in July.
There are concerns the trade deficit could put downward pressure on the value of the dollar and in turn, push down some prices in the stock markets.
That's because foreigners who were paid billions of dollars for the goods the U.S. imported could choose to sell those dollars, and foreign investors might also decide to sell some of their U.S. investments.
September's $8.7 billion deficit with China is the largest ever recorded with any country, pushed up by increased shipments of Chinese auto parts, telecommunications equipment and toys.
For the first nine months of this year, the deficit with China totaled $61.1 billion, for the first time exceeding the deficit with Japan, $60.1 billion.
The trade deficits with Canada - weighing in at $4.7 billion - and Mexico - totaling $2.7 billion - were also records. The deficit with Japan declined, by 9.9 percent, to $6.1 billion.
So far this year, the trade deficit is running at an annual rate of $360 billion, far above the record of $265 billion set last year.
Strong economic growth lasting a record 9½ years has pushed the U.S. unemployment rate down to a 30-year low of 3.9 percent.
Critics of the Clinton administration's trade policy, however, argue that the exploding trade deficit will come back to haunt the country when domestic growth starts to falter.
A blue-ribbon U.S. Trade Deficit Review Commission created by Congress to study the problem divided sharply along party lines earlier this month on causes of the deficit.
Republicans said the imbalance reflected the fact that the United States has been growing at a much faster rate than other nations. Democrats spotlighted problems with foreign trade barriers to U.S. exports.
For September, the $34.3 billion deficit reflected a 3.1 percent surge in imports, which climbed to an all-time high of $126.6 billion. Big increases were recorded in imports of computer chips, civilian aircraft, telecommunications equipment, autos and other consumer goods, including clothing and televisions.
U.S. exports, which had set a record in August, slipped a slight 0.7 percent to $92.4 billion, still the second-highest export total on record.
Gains in overseas sales of organic chemicals, computer chips and civilian aircraft were offset by declines in exports of autos and auto parts and American agriculture products, reflecting drops n sales of soybeans, fish and rice.
The overall deficit showed a slight increase in America's foreign oil bill, which rose 4.2 percent to $10.7 billion. The increase reflected a sharp jump in the price of crude oil, which climbed to an average of $28.98 per barrel, the highest level in 10 years.
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