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UNITED STATES DEPARTMENT OF COMMERCE ■ ■ H F W FOR RELEASE 10 AM = MONDAY, W So c i a l a n d Ec o n o m i c St a t i s t i c s A d m i n i s t r a t i o n B U R EA U OF EC O N O M I C A N A L Y SI S W A SH I N G T O N , D . C . JANUARY 27, 20230 1975 Max Lec ht er 523- 0668 Mar y R. Boul 523- 0601 ♦ BEA 75- 05 MERCHANDI SE TRADE I N THE FOURTH QUARTER 1974 - - Bal anc e of Payment s Basi s — Pr el i mi nar y est i mat es i ndi cat e t hat t he mer c handi s e t r ade def i c i t — t he excess of i mpor t s ov er ex por t s — nar r owed i n t he f our t h quar t er of 1974 t o $1. 5 bi l l i on, s eas on al l y adj ust ed, f r om t he r ecor d def i ci t of $2. 6 bi l l i on r egi st er ed i n t he t hi r d quar t er . The i mpr ov ement i n t he t r ade bal anc e oc cur r ed as expor t s r ose $1. 5 bi l l i on, or 6 per cent , t o a t ot al of $26. 1 bi l l i on, and i mpor t s i ncr eased $0. 5 bi l l i on, or l ess t han 2 per cent , t o $27. 6 bi l l i on. Thes e f i gur es, r epor t ed t oday by t he Bur eau of Ec onomi c Anal ysi s, an agency of t he Commer ce Depar t ment ' s Soci al and Ec onomi c St at i st i cs Admi ni st r at i on, ar e on a bal anc e of payment s basi s, whi c h r ef l ect s adj ust ment s t o Ce ^ ^ k Bur eau t r ade f i gur es f or t i mi ng, cover age, and val uat i on, and ex cl udes mi l i t ar y exj ^ f f s and i mpor t s of t he def ense agenci es. A much f as t er r i se i n t he pr i ce of expor t s t han of i mpor t s — i nf l uenc ed by a shar p j ump i n f ar m ex por t pr i c es —was mai nl y r esponsi bl e f or t he l ar ger ex por t gai n i n t he f our t h quar t er , i n val ue t er ms. ( Pr i ces ar e meas ur ed by t he Census Bur eau' s uni t val ue i ndex, wi t h i ncompl et e f our t h quar t er dat a. ) I n vol ume t er ms, bot h expor t s and i mpor t s edged sl i ght l y downwar d, wi t h i mpor t s di ppi ng s omewhat mor e t han expor t s. A sur ge of pet r ol eum ar r i val s i nt o t he Vi r gi n I sl ands i n Dec ember kept f our t h quar t er pet r ol eum i mpor t s at about t he t hi r d quar t er l evel ; al l ot her i mpor t s appear t o have decl i ned about 1 per c ent i n vol ume. Expor t s of nonagr i c ul t ur al ( nonmi l i t ar y) goods, compr i si ng mor e t han t hr ee- f our t hs of al l expor t s, showed l i t t l e change i n vol ume f r om t he pr ec edi ng quar t er , but f ar m pr oduc t shi pment s decl i ned about 2 per cent . 4 Four t h quar t er expor t s $ Hi gher pr i ces r ai sed t he val ue of bot h agr i cul t ur al and nonagr i c ul t ur al expor t s i n t he f our t h quar t er . I n t he l at t er cat egor y, capi t al goods — l ed by a near - 50 per c ent i ncr ease i n t he val ue of ci vi l i an ai r c r af t del i v er i es — s howed t he l ar gest gai n; machi ner y expor t s r ose onl y 4 per c ent f ol l owi ng a 15 per c ent gai n i n t he t hi r d quar t er . Ther e was a 1C per cent i ncr ease i n aut omot i ve expor t s, mai nl y par t s t o Canada, f ol l owi ng an 18 per cent r i se a quar t er ear l i er . I n cont r ast , expor t s of i ndust r i al suppl i es and mat er i al s decl i ned f or t he f i r s t t i me si nce t he second quar t er of 1972. Coal expor t s wer e a maj or ex cept i on, r i si ng i n bot h val ue and v ol ume despi t e shar pl y cur t ai l ed shi pment s i n December due t o t he coal st r i ke. F o l ^ P c uar t er i mpor t s A l ar ge i ncr ease i n pet r ol eum i mpor t s i nt o t he Vi r gi n I sl ands i n Dec ember ( not r ecor ded i n Census t r ade st at i st i cs) was t he maj or f act or c ont r i but i ng t o t he cont i nued hi gh v ol ume of t ot al U. S. pet r ol eum i mpor t s, but l ower pr i ces r educed t hei r val ue about 2 per cent . ( Pr i ces appear ed t o i ncr eased an es t i mat ed 3 per c ent conc ent r at ed i n i mpor t s of st eel i n t he val ue of sugar ar r i val s. aut o i mpor t s f r om over seas. be r i si ng agai n t owar ds year - end. ) Al l ot her i mp o r t j ^ ^ i n val ue i n t he f our t h quar t er , but t he r i se was and st eel maki ng mat er i al s, and t o a l esser degr ee Mos t ot her i mpor t pr oduc t gr oups decl i ned, es peci al l y Year - t o- y ear devel opment s For t he c al endar y ear 1974 as a whol e, t he t r ade bal anc e was i n def i ci t by $5. 8 bi l l i on ( pr el i mi nar y) , compar ed wi t h a sur pl us of $0. 5 bi l l i on i n 1973. I mpor t s r ose $33. 0 bi l l i on, or 47 per cent , t o a t ot al of $102. 8 bi l l i on; expor t s i ncr eased $26. 8 bi l l i on, or 38 per cent t o $97. 1 bi l l i on. I nt ense i nf l at i onar y pr essur es i n t he Uni t ed St at es and abr oad boos t ed t he val ue of bot h U. S. expor t s and i mpor t s i n 1974. Pr i ce advances wer e es pec i al l y st eep f or i mpor t s, r ef l ec t i ng t he st r ong i mpact of a t r i pl i ng i n t he cost of f or ei gn pet r ol eum. ( Pet r ol eum pr i ces r ose f our f ol d f r om t he f i r s t quar t er of 1973 t o t he second quar t er of 1974 and t hen f l at t ened out . ) The r esul t i ng huge r i se i n t he val ue of oi l i mpor t s was t he pr i mar y r eason f or t he shar p adver se swi ng i n t he t r ade bal anc e i n 1974. I n vol ume t er ms, af t er adj ust ment f or pr i ce changes, i mpor t s decl i ned 1 per cent f r om 1973, and expor t s i ncr eased 8 per cent . The 1974 t r ade def i ci t i n pet r ol eum and pr oduct s amount ed t o $25. 1 bi l l i on compar ed t o a $7. 5 bi l l i on def i ci t i n 1973. Ex cl udi ng pet r ol eum, t he over al l mer c handi s e bal anc e was i n sur pl us by al most $19. 5 bi l l i on. The vol ume of pet r ol eum i mpor t s decl i ned al most 3 per c ent as hi gh pr i ces l ed t o some r educt i on i n pet r ol eum demand and t he Ar ab embar go cur t ai l ed ar r i val s ear l y i n t he year . I mpor t s of al l ot her goods sl i pped about 1 per c ent i n vol ume, but hi gher pr i ces boos t ed t hei r val ue by o n e - f o u r t h s Hi gher pr i ces wer e al so a maj or f ac t or i n t he r i se of expor t s. The val ue of agr i c ul f l l ^ t ur al expor t s i ncr eased one- f our t h, af t er havi ng near l y doubl ed i n 1973. | n vol ume t er ms, f ar m ex por t s decl i ned 10 per c ent i n 1974, par t l y due t o r educed U. S. suppl i es. Expor t s of nonf ar m ( nonmi l i t ar y) pr oduct s r ose i n bot h val ue and vol ume l ast year . Mor e t han t hr ee- f our t h of t he val ue r i se was due t o hi gher pr i ces. Vol ume was up 12 per cent , compar ed t o a 22 per c ent r i se i n 1973. The r educed gr owt h i n f or ei gn demand f or U. S. nonf ar m pr oduct s was mai nl y r el at ed t o t he sl owdown i n ec onomi c act i vi t y abr oad. TABLE FOLLOWS: * ♦ 2 t f Merchandise Trade— balance of Payment3 basis (Millions of dollars, seasonally —adjusted) , , ' EXPORTS Merchandise exports, Census'basis, including reexports, excluding military grant shipments----- -------- Additions to Census exports: Inland freight (to Canada) valuation adjustment— — ------- - ^ 1973 7 0 ,8 2 3 1404 Deductions from Census exports: Exports transferred under U.S. military agency sales contracts identified in Census documents---- Annual 1974 Change I Quarterly 1974 II III IV Change: m-iv 27,084 22,358 24,212 24,958 26,455 1,^97 558 15^ 127 138 145 148 3 1,824 547 350 468 445 561 116 no Other adjustments to Census exports------ ----------------- 327 ^33 10 6 1^5 18 8 -^3 67 Equals: Merchandise exports, adjusted to balance of payments basis, excluding "military"----------- ------- 7 0 ,2 7 7 97,074 26,797 2 2 ,2 8 0 24,070 24,615 2 6 , 10 9 1,494 IMPORTS Merchandise imports, Census basis (general imports)— ------- 6 9 ,4 7 6 31,^96 21,713 25,161 2 7 ,0 6 0 27,144 84 2,31^ 1,919 395 1,314 1,278 36 498 533 443 90 643 557 86 640 541 99 1,044 699 73 38 16 0 247 142 303 208 269 18 9 -19 3^5 35 65 105 95 80 IA *7 97,907 116 351 Additions to Census imports-- ------ --- --- ------- ------Virgin Islands imports from foreign countries------ ------Gold imports, nonmonetary-------------------------------Deductions from Census imports-------------------- -------Automotive valuation adjustment------------------- ....... Inports of U.S. military agencies identified in Census documents----- ------------------------- - 1, 0 0 0 641 359 9 71 661 10 0 , 9 7 2 378 120 225 -3 - 16 13 - 3h Other adjustments to Census imports---- ------- ---- ------- 30 1 595 294 361 247 -235 Equals: Merchandise imports, adjusted to balance of payments basis, excluding "military"----- -— — — ------- 6 9 ,8 0 6 102,837 33,031 22,3^7 25,694 27,165 27,631 466 -3,065 -4,412 645 -9 4 9 -2,102 -6 8 9 1,413 -5,763 -6,234 -67 -1,624 -2,550 -1 , 5 2 2 BALANCE (export surplus +, export deficit -) Merchandise trade, Census basis------ — — ---------------Merchandise trade, adjusted to balance of payments basis, excluding "military"— ------- --------- ---SOURCE: 1,347 U.S. Department of Commerce, Bureau of Economic Analysis, Balance of Payments Division 1, 0 2 8
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