Watch CBSN Live

Global Crisis Hurts US Exports

The deficit in America's broadest measure of trade shot up to an all-time high of $233.4 billion in 1998 as farmers and manufacturers were battered by the global economic crisis, resulting in the first drop in U.S. goods exports in 13 years.

The Commerce Department reported Thursday that the imbalance in the nation's current account swelled by 50.4 percent from last year's $155.2 billion deficit.

The soaring deficit occurred despite the fact that the current account narrowed slightly in the final three months of the year, edging down to $63.8 billion from $65.7 billion in the third quarter.

But analysts believe this slight improvement will be only temporary. They are forecasting another big increase in the current account deficit this year as recessions in Asia, Russia and now Latin America cut demand for farm and manufactured goods.

The current account is considered the best gauge of the country's international standing because it measures not only trade in goods and services, but also investment flows between countries and foreign aid.

The figures released Thursday presented a stark look at the impact the global financial crisis is having on certain sectors of the economy. Exports of American goods fell by 1.2 percent to $671.1 billion last year, the first drop in this category since 1985.

Two-thirds of the decline came from falling farm sales. The other one-third was the result of a drop in demand for manufactured goods.

Written By Martin Crutsinger, AP Economics Writer

View CBS News In