Word: deficits
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Dates: during 1980-1989
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...After soaring 136 points during the first three days of the week, the Dow Jones industrial average fell 47 points on Thursday, when the trade figures were released, then recovered a bit on Friday to close at 1867.04, up 100.30 for the week. Economists were encouraged that the record deficit did not send the stock market into a free fall; they remembered well that a less bleak trade report and a drop in the dollar helped trigger the Black Monday crash. The reason for the milder market reaction this time was that investors were no longer afraid that the Administration...
...imports. That, in fact, is what has happened: this year exports have increased, and the growth of imports has slowed sharply. The problem is that with the dollar continuing to drop precipitously, the cost of the imports is going up much faster than their volume, and the trade deficit is going through the roof...
Only if the dollar's descent slows down will the U.S. at last enjoy an improvement in the trade deficit. Most of the economists surveyed said the dollar would indeed become more stable. Their median forecast has the dollar drifting down only 2.3% next year against the yen and 1.8% against the mark. At the same time, they predicted, the trade deficit will fall nearly 15%, from a record $175 billion this year to about $150 billion...
Howard Wachtel, professor of economics at American University, is worried that if the trade deficit does not show some signs of improvement soon, the dollar might tumble further. That could force the Federal Reserve to raise interest rates to stabilize the U.S. currency, whatever the toll on economic growth. Admits a top Administration official: "There has never been a trade deficit of this magnitude that has not been corrected by a recession...
...essential steps toward keeping inflation in check -- and correcting the trade imbalance -- is a substantial reduction in the federal budget deficit. Years of excessive Government spending have put upward pressure on prices and helped overstimulate demand for imports. Many of the economists in the survey saw the recent budget compromise fashioned by Congress and the White House, which is intended to trim $30 billion from the deficit next year, as woefully inadequate. "The 1987 budget had a lot of phony stuff in it that will come back to haunt us in 1988," warns Jerry Jordan, chief economist at First Interstate...