Turnabout in U.S. Merchandise Trade

The United States accomplished a massive $21·billion improvement in its non-oil trade balance in 1979. More rapid growth of foreign economies compared with the U.S. economy was a major cause of improvement in non-oil trade. In addition, depreciation of the dollar prior to 1979 hel ped to improve the trade balance in 1979. Gold sales by the U.S. Treasury also made a significant contribution to improving the trade balance. Unfortunately, most of th is improvement was offset by increased spending on oil imports, as petroleum prices rose sharply.