The United States' trade deficit in goods and services soared 43 percent last year, to $108.1 billion, the Commerce Department reported yesterday, reflecting growing trade gaps with Japan and China and a recovering U.S. economy's ravenous appetite for imports.
For trade in goods alone, the United States toted up a record-setting deficit of $166.3 billion, despite some improvement in December, officials said.
The goods figure, known as the merchandise trade deficit, shot up from $132.6 billion in 1993, and is a source of frustration for a White House that has promoted free trade as a key to prosperity.
U.S. trade gaps with Japan and China both hit all-time highs last year, together accounting for more than half the red ink. The Japanese imbalance in merchandise trade climbed 11 percent, to $65.7 billion, while the red ink with China surged 30 percent to $29.5 billion.
Nevertheless, some economists predicted that the trade balance will improve in the coming months, as the U.S. expansion cools down and recoveries continue overseas.
"The year as a whole was a serious disappointment," said Stephen S. Roach, senior economist at the Morgan Stanley investment company in New York. "But the [trade] number was not nearly the disaster that many people are making it out to be."
In December, for example, the monthly trade deficit narrowed to $7.34 billion, with U.S. exports to many parts of the world rising and imports to this country declining. That was the smallest monthly trade gap since last March and a pleasant surprise to analysts who anticipated a figure in the $10 billion range.
U.S. trade in services remains strong, meanwhile, with the longtime surplus broadening by 4.2 percent in December; for the year, the services surplus was $58.2 billion, up slightly from 1993.
Robert A. Brusca, chief economist with Nikko Securities in New York, called the December trade figures a "silver lining" that hints of further trade progress in 1995. "The big news is that the bad news isn't worse," he said.
Yet even those who expect the trade deficit to narrow this year pointed to major uncertainties that could make progress far more difficult.
Prominent on the list of wild cards for U.S. trade: Mexico's financial crisis, the outcome of trade talks with China and Japan's ability to handle imports and exports in light of earthquake damage to the key deep-water port of Kobe.
Last year, America's brisk national recovery fueled a binge of import buying -- up 13.5 percent -- which overshadowed a record performance in export sales, up 10.1 percent. Americans last year shelled out rising amounts for foreign autos, computers, semiconductors, clothing and consumer electronics.