U.S. trade gap sets record Broadest measure shows trade gap jumped 31% to record $435 billion March 15, 2001: 8:51 a.m. ET

WASHINGTON (AP) - America's deficit in the broadest measure of trade surged to an all-time high of $435.4 billion last year as an increase in U.S. exports failed to offset a huge rise in imports of consumer goods and oil.

The Commerce Department reported Thursday that the deficit in the current account was up a sharp 31.3 percent from the previous record of $341.5 billion set in 1999.

The increase for the year came as no surprise, given that the quarterly deficits rose steadily to record highs. The fourth-quarter deficit rose to $115.3 billion, a 1.9 percent increase from the $133.1 billion third-quarter imbalance.

The quarterly figures on the current account paint the fullest picture of America's trade troubles. They cover not only goods and services, which are reported in the government's monthly trade statistics, but also investment flows and unilateral transfers, a category that includes foreign aid.

Meanwhile, the Labor Department reported that the number of Americans filing new claims for unemployment benefits was unchanged last week from a revised total of 375,000 in the previous week. The four-week moving average for claims rose to 364,250 last week, the highest level since July 11, 1998, underscoring how the sharp slowdown in economic growth is forcing layoffs at many firms.

The trade deficit has climbed steadily over the past five years as the strong U.S. economy and seemingly insatiable American consumers drew in a flood of imports from around the world. That trade imbalance was a major plus for the global economy, helping countries struck by the Asian crisis to recover and begin growing again.

With the U.S. economy now in a severe slowdown, economists believe the U.S. trade balance will begin to narrow. However, a new concern is that there is no area of the world that can serve as a locomotive, since Japan, the world's second-largest economy, is threatening to topple back into a recession and growth in Europe is also slowing. http://cnnfn.cnn.com/2001/03/15/economy/wires/trade_wg/

-- Carl Jenkins (somewherepress@aol.com), March 15, 2001