The deficit in the broadest measure of U.S. trade shrank to $99.3 billion last year, the first time since 1984 that the imbalance has been under $100 billion, the government said Tuesday.

America's current account balance narrowed by 9.8 percent from a $110 billion deficit in 1989 as the country registered improvements in sales of American merchandise and services and in investment earnings last year.The improvement came despite the fact that the deficit from October through December edged up 4.8 percent to $27.76 billion. The deficit increase in the fourth quarter was blamed primarily on the forgiveness of $7.1 billion in debt held by Egypt to reward the country for joining with the coalition fighting Iraq.

The current account, also known as the balance of payments, is the most closely watched trade statistic because it measures not only trade in merchandise but also trade in services and investments.

The 1990 deficit was the smallest imbalance since a $99 billion deficit in 1984. It marked the third consecutive year of improvement since the current account deficit hit an all-time high of $162.31 billion in 1987.

As recently as 1981, the United States enjoyed a surplus in its current account as earnings by Americans on their overseas investments were enough to offset perennial merchandise trade deficits.

But as Americans handed over billions of dollars to foreigners during the 1980s to pay for imported cars and television sets, the investment cushion eroded. It disappeared altogether in 1985, when the United States became a net debtor for the first time in 71 years.

Simply stated, that means foreigners now own more in U.S. assets than Americans own overseas, a development that has triggered heated debate over whether the United States is losing control of its economic destiny.