WASHINGTON – A surge in oil prices helped push imports up at the fastest pace in 18 years in January, giving the country the largest trade deficit in six months.
The Commerce Department said Thursday the January deficit increased 15.1 percent to $46.3 billion. Exports rose 2.7 percent to an all-time high of $167.7 billion. But imports rose a faster 5.2 percent to $214.1 billion. That reflected a big jump in America's foreign oil bill, underscoring concerns that surging oil prices could slow the economic recovery.
A widening trade deficit hurts the U.S. economy. When imports outpace exports, more jobs go to foreign workers than to U.S. workers.
The politically sensitive deficit with China rose 12.5 percent to $23.5 billion in January, the largest with any country. Last year, the deficit with China rose to a record $273.1 billion, increasing political pressure in this country to take a tougher line on what critics see as China's unfair trading practices such as manipulating its currency to gain trade advantages.
China, which typically runs huge trade surpluses with the rest of the world, reported a surprise deficit of $7.3 billion for February as surging prices for oil and other commodities pushed imports up 19.4 percent while its exports dropped dropped 2.4 percent.
The export decline reflected the fact that Chinese businesses were idled for the weeklong Lunar New Year holiday. Analysts said the rare trade deficit for China was likely to be temporary and not the start of a trend.
The overall U.S. deficit in January would would translate into an annual deficit of $556.1 billion. Last year's imbalance was $495.7 billion, which was 32.8 percent higher than in 2009 when a deep recession in this country had shrunk America's appetite for foreign goods.
Economists expect that this year's deficit will be essentially unchanged from 2010 as rising imports, reflecting a growing U.S. economy, are matched by continued strong export sales. However, they caution that this forecast could turn out to be too optimistic if oil prices, which have surged on political turmoil in Libya and other countries in the region, keep climbing.
For January, America's oil bill jjmped 9.5 percent to $34.9 billion, the highest level since October 2008, reflecting a $4.56 per barrel increase in the average price of imported crude oil, which rose to $84.34. In recent weeks, oil has been trading above $100 per barrel so oil imports will likely be even higher in the February and March trade reports.
President Barack Obama has set a goal of doubling U.S. exports by 2015. The administration is taking a tougher stance in trade disputes with China, including applying more pressure to get China to allow its currency to rise in value against the dollar.
On Wednesday, Obama sought to highlight the importance of the US-China relationship by nominating Commerce Secretary Gary Locke to be U.S. ambassador to China. Locke would be the first Chinese-American to serve in that post.
The rise in U.S. exports pushed them to a record high, surpassing the old mark of $165.7 billion set in July 2008 before a financial crisis in the United States pushed the global economy into a deep recession. The export strength in January reflected strong sales of U.S. autos, industrial machinery, medical equipment and farm products including wheat.
America's deficit with Canada edged down 4.9 percent to $3.7 billion while the imbalance with the European Union dropped 15.3 percent to $5.6 billion. The U.S. deficit with Japan fell 15.6 percent to $5 billion.