U.S. Trade Deficit Reaches Record High In 2000

ByBridgeNews The U.S. trade deficit narrowed for the third consecutive month in December, contracting 0.4% to $33 billion as both exports and imports declined. The gap was just below November's revised $33.1 billion deficit but above analysts' expectations of a $32.4 billion gap. Despite the monthly drop, for 2000 as a whole, the deficit shot up 39.5% to a record $369.7 billion from 1999's $265.0 billion. Financial market participants have shrugged off the size of the deficit, saying it merely reflects the long-term attractiveness of U.S. assets and the desire of foreign investors to deposit capital here. Those investment dollars offset the outflow of American money as imports exceed exports. That line has been echoed by Treasury Secretary Paul O'Neill, who has said he is not "alarmed" by the deficit. But it may soon become a mounting concern if the economy cools sharply or stock prices plunge, prompting global money managers to move their funds elsewhere.