By Peronet Despeignes in Washington Published: September 20 2000 13:34GMT | Last Updated: September 21 2000 00:21GMT The monthly US trade deficit hit a record high in July as exports fell and imports continued to rise, according to new data out on Wednesday. The Department of Commerce said the monthly deficit in goods and services - the difference between what the US buys from and sells to the rest of the world - grew to about $31.9 bn in July from a revised $29.8bn in June. Sales of industrial supplies, consumer goods, cars, car parts and other exports fell 1.4 per cent to $89.7bn and imports inched up 0.6 per cent to $121.5 as money spent on oil imports soared. Bilateral deficits widened to new records with China and Japan, also rising with Korea and Taiwan. Deficit in the US' trade with western Europe grew 66 per cent month-on-month to 7.2bn, as the sliding euro raised the cost of US exports in Europe and reduced the cost of European imports in the US. With downard revisions made to second-quarter data, the July report marks a new record and the second time in five months that the monthly US trade gap has exceeded $30 billion. "The US economy is now running a trade deficit of about a billion dollars a day," said David Ingram, an economist with Economy.com, a Pennsylvania consultancy firm. The willingness of foreigners to lend to and invest in the US has made it possible and allowed the dollar to strengthen despite the widening deficit. Foreign ownership of stocks, bonds and other assets in the US increased by $222.7bn in the second quarter, according to Commerce, following an increase of $236.5bn in the first. "As long as the dollar remains strong, and foreigners find the US a superior investment environment, the trade deficit will continue to set new records," Ingram said. But the trade report contained clear evidence of a slowdown in US consumer spending beyond the headline figure. While imports grew from June to July, the growth, unlike the expansion of exports, continued to slow on a year-on-year basis. In March, imports were up 23 per cent year-on-year, but in July only 17.1 per higher - a result inflated by the renewed surge in oil prices through the summer. Another sign of slowing growth in the US came in the Federal Reserve's survey on regional economic conditions, widely known as the "beige book." It noted "further signs of slowing growth in several districts" across the Southeast and Midwest through August and early September. The report cited softening home sales and construction and "sluggish" retail sales growth, but most districts continued to cite "strong" overall conditions, with "tight" labour markets, "upbeat" expectations and "widespread" reports of wage increases. Higher labour costs were "an increasing problem," the beige book said, but showed few signs of "being passed through to consumers as higher productivity and competitive pressures held firms' prices in check." But several districts said recent sharp increases in health care and energy costs "might eventually be passed through to consumers." _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
