WASHINGTON – The trade deficit shot up in March to the highest level in six months, driven upward by a big jump in imported oil. The politically sensitive deficit with China shrank as U.S. exports to that country hit an all-time high.
The Commerce Department reported Thursday that the gap between what the United States imports and what it sells to the rest of the world rose to $63.9 billion in March, up 10.4 percent from the February level.
That was a bigger-than-expected deterioration in the trade deficit from the $60 billion deficit that analysts were forecasting. It reflected a big 17.6 percent jump in oil imports, which climbed to $24.6 billion, the highest level in six months.
In other economic news, the Labor Department reported that the number of laid off workers filing claims for unemployment benefits fell to 297,000 last week, a drop of 9,000 from the previous week.
So far this year, the trade deficit is running at an annual rate of $722.6 billion, slightly below last year's all-time record of $765.3 billion. The deficit has set new records for five consecutive years.
Critics of President Bush's trade policies contend that the administration has not done enough to protect American workers from unfair foreign competition from low-wage countries such as China.
Democrats used the soaring trade deficits and the loss of 3 million manufacturing jobs since Bush took office in their successful effort last year to regain control of both the House and Senate.
The administration, worried about a protectionist backlash in this country, has toughened its approach to China, imposing penalty trade tariffs in a dispute over Chinese paper imports and filing two new trade cases this year against the Chinese before the World Trade Organization.
Treasury Secretary Henry Paulson has pledged to keep up pressure on the Chinese to do more to open their markets to American goods. The two countries will hold the second round in a new series of economic talks later this month in Washington.