Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 22, 1994 TAG: 9403220050
SECTION: BUSINESS PAGE: B7 EDITION: METRO
SOURCE: Associated Press
DATELINE: LENGTH: Medium
But the improvement comes from statistical legerdemain rather than any dramatic change in America's economic fortunes.
The Commerce Department today will release a revamped monthly trade report that for the first time will indicate how the country is doing each month in services, a diverse category that ranges from airline tickets to film and television sales overseas.
The service category has been growing rapidly in recent years and, unlike merchandise trade, is an area in which the United States is running large surpluses.
For 1993, the United States enjoyed a surplus in services of $55.7 billion, compared with a deficit in goods of $132.5 billion.
Once the services figure is added to the merchandise performance, the deficit in goods and services shrinks to $76.8 billion, still a deficit but significantly lower than the $132.5 billion imbalance in goods alone.
While the services figure was calculated every three months as part of the current-account report, the government now has decided to report that figure monthly along with merchandise trade.
Commerce Department officials insist the motive was not to find a way to shrink the deficit on paper, but simply to emphasize that America's trade performance is not as bleak as it has appeared with the monthly figures on product trade.
Carol Carson, head of Commerce's Bureau of Economic Analysis, said that while America's exports of manufactured goods has doubled since 1980, its sales of services to foreigners has quadrupled in the same period.
Services now represent 29 percent of American export sales, up from 18 percent in 1980.
Charles Waite, associate director for economic programs at the Census Bureau, which is helping to prepare the new trade report, said the merchandise figures would still be available each month for those interested in following them.
Private economists generally said they supported the government's proposed changes, although no one should believe that the country's competitive standing had suddenly improved.
"The risk is that some people will look at the small monthly deficits and conclude that we don't have a trade problem or a competitiveness problem any more," said Lawrence Chimerine, chief economist at the Economic Strategy Institute, a Washington think tank that receives corporate and union support.
Analysts noted that the merchandise trade deficit soared 36 percent last year to the highest level in five years. They are predicting an even bigger merchandise trade gap this year as America's primary overseas markets in Europe and Japan remain mired in recession.
While unexpected changes in trade figures have thrown financial markets into a turmoil often, analysts predicted Wall Street would take today's report in stride.
Many analysts said the markets probably would choose to continue focusing on the merchandise trade deficit rather than overall goods and services.
by CNB