The US trade deficit widened by $2.6 billion (€1.9 million) to $58 billion in January, the second-highest monthly gap on record, as surging demand from US consumers sucked in a record quantity of foreign goods.
The deterioration in the US trade position came with oil prices at around $35. Economists warned that with oil now rising towards record highs, the US deficit could soon climb above $60 billion a month.
"Bad as these figures look, they are actually worse than they first appear," said Alan Ruskin, director of research at 4Cast, the economic consultancy.
The ballooning deficit caused some analysts to revise down their growth forecasts.
Morgan Stanley scaled back its first quarter forecast from 4.5 to 4 per cent.
Analysts had expected dollar weakness over the last two years to help stabilise the US trade position. But, so far, the dollar's fall appears to have been more than offset by the strength of US consumer demand.
Strong employment gains at the start of the year appear to have further increased the appetite of US consumers for foreign goods.
Imports of consumer goods rose $2 billion to a record $34.6 billion, with very strong demand for electronic goods, clothing and furniture. Imports of apparel and textiles climbed $500 billion in January.
Overall, America's import bill jumped 1.9 per cent over the month to $159.1 billion, while exports rose 0.4 per cent to $100.8 billion.
The most dramatic rise in the deficit over the past year has been with China, with the bilateral gap rising from $11.5 billion in January 2004 to $15.2 billion in the latest month.
The monthly deficit with the European Union has climbed from $6.4 billion to $8.1 billion over the past year. This is despite a slide in the dollar against the euro. - (Financial Times Service)
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