Word: tradings
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Dates: during 1980-1989
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Last week's upheavals only made the economic outlook fuzzier. One of the strongest stock rallies since the crash suddenly fizzled when the Government announced that the U.S. trade deficit had hit a record $17.6 billion in October, up 25% from September. The news threw the world's currency traders into a frenzy, and the dollar plummeted to its lowest levels against the Japanese yen and the West German mark since the 1940s. The turmoil could not help pushing urgent questions into the minds of every reader of the financial pages: What is going on with the U.S. economy...
Their views on the U.S. economy for 1988 were far from uniform, but the majority opinion was firm and a bit surprising. Despite the stock crash, the plunging dollar and the scary new trade figures, most of the economists insist that America will muddle along next year with no recession, no significant rise in unemployment or inflation and only a modest increase in interest rates. Their median forecast is for growth in the gross national product, after adjustment for inflation, to slow only slightly, from 3.4% this year to 2.7% in 1988. Asserts Sam Nakagama of the Manhattan-based consulting...
Last week's trade report would seem to support Takahashi's pessimism. Although exports climbed 3.6% in October, to $21.7 billion, imports jumped 12%, to $39.4 billion. Admitted a top economist in the Reagan Administration: "This wasn't something you want to try to put a happy face...
Certainly Wall Street was not happy. 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...
Experts have been surprised for months now that the long fall of the dollar, which has declined by 40% against the major currencies since early 1985, has not produced a turnaround in the trade balance. According to economic theory, a cheaper dollar makes U.S. products less expensive to foreigners and thus eventually boosts demand for American exports. Conversely, a weak dollar makes foreign goods more costly in the U.S. and dampens Americans' enthusiasm for 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...