As Expected, U.S. Trade Deficit Increases In January

By John S. McClenahen With exports falling and imports rising, the U.S. trade deficit in goods and services grew by $3.8 billion in January to $28.5 billion. The deficit in December 2001 was $24.7 billion, according to revised figures from the U.S. Department of Commerce. U.S. exports decreased $100 million in January to $78 billion. Exports of consumer items, industrial supplies and other goods totaled $54.8 billion in January, down $200 million from December, while exports of U.S. services were basically unchanged at $23.1 billion. U.S. imports rose to $106.5 billion in January, a $3.7 billion increase from the $102.8 billion recorded in December. Imports of goods were up $3 billion to $89.5 billion, while imports of business and other services rose $800 million to $17.6 billion in January. "It appears that the deterioration in net exports for the first quarter [of 2002] should reduce real GDP growth by over one percentage point," says Stan Shipley, a senior economist at Merrill Lynch & Co., New York. "However," he interjects, "other components of the economy are quite robust. We project first-quarter GDP should post a gain between a 5% and 6% [annual] rate, not bad for the first quarter of recovery."

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