A surprisingly large 30 percent trade-balance improvement in Decemberallowed the nation to close out 1989 with a $108.6-billion deficit, the smallest in five years, the government said Friday.
While conceding that most of the December improvement was dependent on special factors, the Bush administration hailed the 8.4 percent narrowing in the deficit for the year as evidence that the administration's effort to open foreign markets was succeeding.
However, private economists were not as enthusiastic, pointing out that while U.S. exports hit an all-time high last year, so did imports, driven upward by America's growing dependence on foreign oil.
Some economists forecast that the deficit this year will resume worsening as consumers continue their love affair with imported products and the foreign oil bill rises.
But other economists were not as pessimistic, believing that 1990 would show another slight improvement in the deficit, although probably not enough to dampen protectionist cries in Congress.
The 1989 trade deficit followed a $118.5-billion deficit in 1988 and was the smallest since a $106.7-billion deficit in 1984. However, it still represented the sixth consecutive year that the difference between imports and exports remained above $100-billion.