U.S. trade down

Press, Volume CXI, Issue 32777, 30 November 1971, Page 15

U.S. trade down

(N.Z. Press Assn. —Copyright)

WASHINGTON, Nov. 29.

The American balance of trade with foreign countries plunged last month into its heaviest deficit since the 19305, in spite of the Administration’s 10 per cent surcharge on Imports and the upward float of foreign currencies against the dollar. The Commerce Department reports that the October balance had a deficit of SUSB2I.4m, exports having fallen by 40 per cent during the month.

This was the worst showing of the United States foreign trade account since the years

immediately after the depression.

The cause was the East and Gulf Coast dock strikes, which had a stronger impact on exports than on imports.

The assistant commerce secretary for Economic Affairs (Mr Harold Passer) forecasts that the United States is almost certain to suffer its first annual trade deficit in recorded history this year. However, another Commerce Department report today shows that leading indicators of future business performance moved up by 1.2 per cent in October, foreshadowing a recovery in domestic economic activity.

Mr Passer says that this showing is consistent with the unofficial forecast that the American economy will grow 6 per cent in real terms next year, allowing for an inflation rate of between 3 and 3} per cent. A rise in American economic activity would be welcomed by foreign powers, because it would lead to an increase in the American demand for all goods, including Imports.