January Trade Deficit Hits Record $68.5B

The U.S. trade deficit widened more than expected in January to a record $68.5 billion, as record imports fueled by high oil prices outstripped record exports propelled by stronger foreign demand, a U.S. Commerce Department report showed on Thursday.

The monthly trade gap swelled 5.3 percent from a revised estimate of $65.1 billion in December. It also surpassed a median forecast of $66.5 billion made by Wall Street analysts.

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The biggest ever monthly deficit in January follows a record annual trade deficit of $723.6 billion in 2005. The trade gap would exceed $800 billion in 2006 if it continued to run at the pace set in the first month of the year.

High prices for imported oil, which increased more than 4 percent in January to $51.93 per barrel, helped push the trade gap to a new record. The United States ran an $8.4 billion deficit with the Organization of Petroleum Exporting Countries, growing 11.6 percent from December.

The monthly trade gap with China widened 9.9 percent to $17.9 billion in January. The persistent deficit with China, the United States' largest with any single country, has fueled charges in Congress that China is an unfair trader that manipulates its currency to gain a trade advantage. Manufacturers and politicians have demanded that Beijing revalue its yuan currency.

Overall imports were $182.9 billion, up 3.5 percent from December. Imports set records in several categories, including food, feeds and beverages, industrial supplies and materials, capital goods, autos and auto parts and consumer goods.

But in a sign of improved economic growth overseas, U.S. exports also increased in January to a record $114.4 billion, up 2.5 percent from the prior month.

The export rise was led by record shipments of industrial supplies and materials, capital goods and auto and auto parts.