Trade gap widens 4.9 pct.
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January 17, 1997: 10:14 a.m. ET
Bounce in business with China, Japan rein in deficit at $8.4 billion
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NEW YORK (CNNfn) -- Thanks to increases in business with China and Japan as well as fewer oil imports, the U.S. trade deficit climbed by 4.9 percent in November, the U.S. Commerce Department reported.
The gap between exports and imports increased $8.4 billion from $8.01 billion in October. Wall Street analysts expected a $9.8 billion increase.
Total November exports hit a record $71.97 billion, expanding 0.3 percent, while imports grew by 0.8 percent to $80.37 billion, Commerce said.
The trade gap's latest level points to a competitive U.S. economy almost in spite of a strengthening dollar, one analyst said.
"World economies are starting to grow a little better," said Ronald Hill, an equity strategyist at Brown Brothers Harriman. "But I think it's really a key that the American industry is still competitive with the dollar significantly higher than it was last year and [as] exports continue to go overseas."
Dramatic improvements in U.S. business with China fueled the shrinking of the trade shortfall, as the deficit with China plunged 38.8 percent to $3 billion in November. The gap was the smallest since April, when it totaled $2.3 billion.
The shrink in the trade gap with China occurred in part because of merchants who had already stocked inventories for Christmas. Toy and clothing imports dropped sharply from October.
The November gap with Japan narrowed 12.9 percent to $4.32 billion. For the first 11 months of 1996, the total deficit of $43.4 billion in trade with Japan was the lowest for the period since 1991.
Also helping hold the trade gap in check, oil imports dropped sharply in November as winter heating oil inventories continued to build.
Crude petroleum imports shrank to $4.11 billion from $4.81 billion in October.
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