January trade deficit jumps to $46.3 billion
WASHINGTON — A surge in oil prices and rising demand for foreign cars and machinery helped push imports up at the fastest pace in 18 years in January, giving the country the largest trade deficit in six months.
The January deficit increased 15.1 percent to $46.3 billion, the Commerce Department said Thursday.
Exports rose 2.7 percent to an all-time high of $167.7 billion. But imports rose at nearly twice the pace of exports, to $214.1 billion. A big jump in demand for a variety of foreign goods from industrial machinery and telecommunications equipment to autos drove the increase. America's foreign oil bill rose 9.5 percent, underscoring concerns that higher oil prices could slow the economic growth.
A widening trade deficit hurts the U.S. economy. When imports outpace exports, more jobs go to foreign workers than to U.S. workers.
Some economists said they would lower their estimates for economic growth in the January-March quarter based on the wider deficit. But the rise in exports could also boost job growth.
China, which typically runs huge trade surpluses with the rest of the world, reported a surprise deficit of $7.3 billion for February. Higher prices for oil and other commodities pushed imports up 19.4 percent while its exports 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 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. However, they caution that the forecast could turn out to be too optimistic if oil prices, which have risen on political turmoil in Libya and other countries in the region, keep climbing.
For January, America's oil bill jumped 9.5 percent to $34.9 billion, the highest level since October 2008. The average price of imported crude oil 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.
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 the financial crisis. 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.