Sliding dollar helps U.S. exports soar 4%

Trade deficit narrowed to $42.1 billion in Feb. after record high in Jan.

April 15, 2004|By AGENCE FRANCE-PRESSE

WASHINGTON - U.S. exports increased at a record pace in February, taking advantage of a weaker dollar and slightly trimming the huge trade deficit.

Exports soared 4 percent, the biggest rise since October 1996, to an unprecedented seasonally adjusted $92.4 billion, boosted by a sliding dollar, the Commerce Department said yesterday.

Imports advanced 1.6 percent to $134.5 billion, also a record, as commodity prices surged.

The overall trade deficit narrowed 3.2 percent to $42.1 billion after hitting a record $43.5 billion in January.

Market analysts had expected the trade gap to narrow, albeit by a smaller margin, as the weaker dollar made U.S. goods and services cheaper for foreign buyers, said Joel L. Naroff, president of Naroff Economic Advisors.

"Clearly, the [trade] deficit is way out of control, but at least it is a small decline instead of an increase," he said.

Jay Bryson a global economist at Wachovia Securities, noted that "the depreciation of the dollar over the past two years has improved the price competitiveness of American goods."

U.S. exports in February advanced broadly, with industrial supplies at a record $15.9 billion, automobiles at a record $7 billion and capital goods at a three-year high of $27.3 billion.

Mad-cow fears hurt beef exports after the discovery in December of a cow with bovine spongiform encephalopathy. Exports of beef products in the first two months of the year were 27 percent lower than they were a year ago.

Imports were pushed up by commodity prices, with industrial supplies advancing 7.4 percent to a record $29.5 billion in February.

The petroleum deficit widened 2.5 percent to an 11-month record of $11.1 billion. The United States cut crude oil imports by 21.6 million barrels to 287.8 million barrels in February, as the average price rose 62 cents to $29.17 a barrel, an 11-month high.

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