Oil price gain pushes US trade gap to record level in January

Economics

American trade deficit increased more than 5 per cent to a record $68.5 billion (£39.4 billion) after a jump in the cost of crude oil in January.
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The sharper than expected rise in the deficit, from $65.1 billion in December, came as an increase of more than 4 per cent in the oil price in January raised America’s bill for imported energy, leading to record overall imports in the month.
However, the latest bad news on the international trading position of the world’s biggest economy was tempered by figures showing US exports rising strongly, by 2.5 per cent in the month, to a record level of $114.4 billion.
Total imports into the United States rose 3.5 per cent from December to $182.9 billion, with records in a number of categories of goods, including food, drinks, and animal feed; industrial supplies and materials; cars and vehicle parts; and consumer goods.
The rise in exports was led by increased sales abroad of industrial materials; capital equipment and components; and car and vehicle parts.
January’s deficit came after America’s annual trade gap grew to a record $733.6 billion last year and underlined the prospect that the deficit could exceed $800 billion in 2006 if it continues to rise at the pace recorded at the start of the year.