Export Increase Is 'Heartening News'

By John S. McClenahen With imports of $127.43 billion and exports of $86.16 billion, the U.S. trade deficit in goods and services was $41.27 billion in September, the U.S. Commerce Department reported Nov. 13. That was about $1 billion higher than economists generally expected and the first increase after five months of decline. However, U.S. exports rose by $2.366 billion in September, which particularly pleased Jerry J. Jasinowski, president of the Washington, D.C.-based National Association of Manufacturers. "This was the largest monthly increase in exports we have seen in 39 months," says Jasinowski. "Given the sharp decline of exports in recent years, this is heartening news." Capital goods and automotive products accounted for 58% of the increase. "Clearly, the downward movement in the value of the [U.S.] dollar, combined with improving economic growth abroad, is increasing export opportunities for U.S. companies," he says. "While I think that a strong domestic recovery will likely lead to higher trade deficits over the coming months, improving economic conditions abroad in 2004 and continued realignment of the dollar should support stronger export growth and an improving trade balance starting in the middle of next year." Meanwhile, the U.S. Labor Department reported that prices the U.S. pays for imports rose just 0.1% in October, far less than the 0.5% increase that economists expected. And excluding petroleum, prices for imports actually declined 0.1% last month. On the other side of the trade ledger, prices for U.S. exports to the rest of the world rose 0.3% in October, with prices rising for both agricultural exports (such as soybeans and cotton) and non-agricultural exports (such as autos and consumer goods).

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