Indicator of the Week

Confidence in the U.S. economy was buoyed by two reports last week: a sharply narrowed federal budget deficit and the first foreign trade surplus in almost three years.

Surging tax receipts and reduced spending cut the budget deficit in fiscal 1973 to $14.4 billion; that was $8.8 billion less than last year, and $10.4 billion less than January forecasts. President Nixon again predicted that he could balance the fiscal 1974 budget without raising taxes. The budget deficit for the last three fiscal years:

1971 1972 1973

$23.3 $23.2 $14.4

BILLION BILLION BILLION

The nation's trade balance finally pulled out of the red, lifted by record exports of farm products and more recently by sales of nonagricultural goods. Though the second quarter surplus was modest, the trade improvement should enhance chances for reform of the world money system at the International Monetary Fund meeting in Nairobi in September. U.S. officials predict further gains in the trade balance later this year as devaluation of the dollar makes U.S. exports more competitive in the world. The second quarter U.S. trade figures for the last three years:

1971 1972 1973

-$782 -$1.7 + $22.9

MILLION BILLION MILLION

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