Economic Trends

U.S. EXPORTS' STRONG SUIT

Although the greenback's weakness and economic growth overseas should help trim the widening U.S. merchandise trade deficit, Jack W. Lavery of Merrill Lynch & Co. argues that it is America's surging services exports that should really take off.

The reason: Compared with goods, the export of services--including travel, financial transactions, insurance, royalties, and fees--is more concentrated in areas where currency shifts and economic momentum are enhancing America's trade prospects. Last year, for example, while Latin America and Canada accounted for one-third of U.S. trade in goods, some three-fourths of America's growing $60 billion trade surplus in services was racked up in Western Europe, Japan, and Southeast Asia.BY GENE KORETZ