US trade gap hits seven-month high
WASHINGTON – The US trade deficit struck a seven-month high in January as imports from China surged and oil prices rose, overwhelming a solid gain in exports, official data showed Thursday.
The United States started 2011 with a 15.1 percent jump in its trade gap to $46.3 billion, the highest mark since the 2010 peak in June, the Commerce Department said. The December deficit was revised to $40.3 billion.
Imports increased for the fourth consecutive month in January as the US economic recovery picked up steam. Imports rose 5.2 percent from December at $214.1 billion, lifted by increasingly expensive oil imports.
Petroleum imports reached their highest level by cost since October 2008 as the average barrel price of imported crude oil leaped to $84.34 dollars from $79.78 in December.
Exports rose at a weaker pace of 2.7 percent to $167.7 billion, although the United States exported a record amount of goods for the month of January.
That was good news for President Barack Obama, who is seeking to double exports by 2015 to help to spur employment in an essentially jobless recovery from recession.
Still, the deficit disappointed, helping to send shares on Wall Street tumbling. Analysts had forecast on average a deficit of $41.5 billion.
The US trade balance was in the red with all major trading partners.
The politically sensitive deficit with China grew to $23.3 billion after narrowing in December to $20.7 billion.
One key factor was a 20 percent plunge in US exports to the world’s second-largest economy.
Last year the gap swelled to a record $273.1 billion as China for the second year surpassed Canada as the largest seller of goods to the United States.
Critics accuse China of deliberately keeping its yuan currency undervalued to boost exports.
“The January trade deficit surge, coming on top of a 32-plus percent rise in last year?s deficit figure, is telling Congress loudly and clearly to figure out how to do trade policy right before plunging ahead with new agreements,” said Alan Tonelson of the US Business and Industry Council.
“Step One needs to be solving our trade crisis with a China that remains highly protectionist despite years of US pleadings,” he said.
The US trade gap was $3.7 billion with Canada, the top US trading partner, and $4.9 billion with Mexico.
With the 17-nation eurozone, the trade deficit stood at $4.9 billion.
Ian Shepherdson at High Frequency Economics noted the surprising leap in the deficit reflected a huge jump in goods imports.
“Ex-oil and aircraft, they soared by 5.3 percent, the biggest monthly increase since May,” he said.
Macroeconomic Advisers analysts said the trade report would not change its US gross domestic product growth forecast of 2.9 percent in the first quarter.
“Both exports and imports were stronger than expected through January, but the effect on our forecast for net exports was minor,” it said.
Goods imports increased in almost every category, including industrial supplies, autos and consumer goods.
The United States, for example, imported $11.6 billion in automobiles and auto parts in January, the highest level since July 2008.
Among consumer goods, imports notably rose in textiles and furniture.