Good And Bad For 97 Trade

With U.S. imports of goods and services surpassing the $1 trillion mark for the first time in history and the deficit of imports over exports at $113.7 billion, the poorest performance in nearly a decade, the 1997 U.S. trade figures reported by the U.S. Commerce Dept. on February 19 don't offer much to cheer about. But there is this positive note: Last year U.S. exports hit an all-time record of $932.3 billion, an amount larger than neighboring Canada's entire economy. Economists expect the U.S. trade deficit to grow this year as U.S. manufacturers and service providers have a tough time making sales in financially troubled Asian export markets and Asian exports, their prices lower as a result of devalued currencies, flow into the U.S. But this scenario, too, has a positive component. Low-priced imports will help hold down U.S. inflation, making it more likely that the Federal Reserve Board will not raise U.S. interest rates and, indeed, may cut the critical federal funds rate, now at 5.5%, by at least 25 basis points.