WASHINGTON – The U.S. trade deficit (search) widened unexpectedly in November to a record $60.3 billion, propelled by the highest-ever oil import bill and a drop in exports, a government report showed on Wednesday.
The trade gap topped $60 billion for the first time and defied Wall Street expectations that it would narrow to $54 billion in November. October's deficit was revised up to a $56.0 billion gap from the originally reported $55.5 billion.
The deficit has continued to balloon despite a 50 percent drop in the value of the dollar against the euro over the past three years, which has been expected to gradually narrow the gap.
The trade shortfall for the first 11 months of 2004 was $561.3 billion, well past the record of $496.5 billion set for all of 2003.
Although average oil import prices retreated slightly in November, they remained high enough to push the value of crude oil imports to record $13.4 billion.
Meanwhile, imports from China fell only fractionally to $19.6 billion from the record $19.7 billion set in October. The trade imbalance with China accounts for about 25 percent of the overall U.S. trade deficit.
Rising U.S. consumer demand for household goods and other products helped boost overall imports by 1.3 percent to a record $155.8 billion. Strong demand for advanced technology products widened the deficit in that category to a record $5.8 billion.
U.S. exports slipped 2.3 percent to $95.6 billion, as shipments of U.S. industrial supplies and materials — including things such as plastic and chemicals — fell in the face of weaker foreign demand. U.S. auto and auto part exports also edged lower.
Even though the drop in the value of the dollar makes U.S. exports more competitive, demand from major U.S. trading partners remains weak and the Federal Reserve (search) has cautioned against expecting any significant improvement in the near term.
While the U.S. trade deficit with China improved slightly from the record set in October, the bilateral gap with Japan was the highest since October 2000 and deficits with Canada, Russia and South Korea set records in November.