Trade Deficit Widens Again

Despite record exports, the nation’s trade deficit widened in April after shrinking in March to the lowest level in four months. American consumers poured out money on foreign toys, games, sporting goods and pharmaceutical products.

The Commerce Department said Thursday the deficit in goods and services totaled $8.4 billion, up from a revised $7.8 billion in March, which had been the smallest since $7.7 billion last November.

The report showed the deficit with Japan, which declined through much of 1996, continues to advance this year.

That was a likely topic for President Clinton and Japanese Prime Minister Ryutaro Hashimoto during their scheduled meeting Thursday in Denver prior to this year’s summit of major industrial nations.

Overall, U.S. exports inched up 0.2 percent to $78.4 billion in April, led by telecommunications equipment and other advanced technology goods, but were offset by a 0.9 percent advance in imports to $86.7 billion.

During the first four months of this year, the gap was running at a $112.4 billion annual rate, wider than the revised $111 billion in 1996 and the widest since $115.8 billion in 1988.

Still, economist Mike Fenollosa of John Hancock Financial Services in Boston noted import growth was less than half the 2 percent jump in March. “It reflects the fact the economy has cooled off,” he said.

A second report Thursday also suggested the economy is moderating. The Labor Department said first-time claims for jobless benefits jumped by 8,000 last week to 347,000, highest since 348,000 during the week ended May 8 when data were skewed by the effects of labor strikes. The less-volatile fourweek average was up 6,250 to 335,500.

As usual, the biggest trade deficit was with Japan, up 5.1 percent to $4.8 billion, highest since $4.9 billion last October. Figures released this week by the Japanese government indicate the gap widened even farther in May.

The deficit with China, expected to surpass the Japanese gap this year, shot up 33.3 percent to $3.5 billion from $2.6 billion in March.

The United States continued to run deficits with its North American Free Trade Agreement partners, although at a slower pace.

The imbalance with Canada, the biggest U.S. trading partner, plunged 26.3 percent to $970 million, lowest since $900 million in March 1995. Exports of $13.3 billion and imports of $14.3 billion were the highest on record with any country.