WASHINGTON — The U.S. merchandise trade deficit swelled by 20.9% to $10.5 billion in February as Americans increased their appetite for foreign goods, the government said today.
The Commerce Department said the sharp deterioration in the trade picture reflected a 5.3% increase in imports, which swamped a slight 0.6% rise in export sales. The report was in line with economists' expectations.
The February deficit, combined with a revised shortfall of $8.68 billion for January that was the lowest since last July, would translate into an annual imbalance of $115 billion. The trade gap totaled $119.76 billion in 1988.
Last year's figure represented a 21.3% improvement over 1987's record high of $152.1 billion, but analysts generally expect the positive trend to fizzle this year.
Rising prices for imported oil and a strengthening of the value of the dollar, which make U.S. goods more expensive overseas, are contributing to the stall.
"We're going to have a lot more increases in the trade deficit. It's going to go $12 billion a month pretty soon and it's going to stay there," said Michael K. Evans, an economic consultant in Washington. "The export boom is clearly slowing down. One reason is the 10% appreciation in the dollar over the last year."
The sharp narrowing of the trade deficit last year was credited with providing almost half of U.S. economic growth. With trade providing less momentum, overall growth, as measured by the gross national product, is expected to slacken as well.