January Trade Gap Widens Less than Expected


The U.S. trade deficit widened-less-than expected in January, as strong foreign demand boosted exports to a record and as oil prices averaging $84 per barrel pushed imports to an all-time high, a Commerce Department report showed on Tuesday.

**FILE** A cargo ship uploads containers at the Jebel Ali port about 40 kms south of Dubai, United Arab Emirates, in this file photo from June 22, 2006. Dubai's state-run port operator, Dubai Ports World, is looking at acquiring terminals in Halifax, Nova Scotia. Canada says a Canadian Senator. (AP Photo/ Kamran Jebreili-File)
Kamran Jebreili

The trade gap swelled slightly to $58.2 billion, from a downwardly revised estimate of $57.9 billion for December.

Wall Street analysts had expected the January trade gap to widen to $59.7 billion, from $58.8 billion previously estimated for December.

U.S. financial markets paid little attention to the report, focusing instead on a coordinated move by the Federal Reserve and other central banks to pump liquidityinto the financial system.

The U.S. oil import bill hit a record $27.1 billion in January, as average prices for imported oil rose for an 11th consecutive month to a record $84.09 per barrel. A year earlier, the average price was $52.23 per barrel, 61 percent lower.

The petroleum portion of the overall deficit exceeded the non-petroleum portion for the first time since October 1992, partly reflecting slackening U.S. demand for foreign-made goods such as TVs, clothing, appliance and furniture as the economy slows.

Imports of industrial machinery and other capital goods also fell in January.

Imports from China, which maintains a tightly managed foreign exchange rate, rose nearly 2.0 percent in January to $26.2 billion. But from the European Union, imports declined 4.6 percent to $27.3 billion. The euro has risen sharply in value as the dollar has declined, making European exports more expensive in world markets.

U.S. exports rose 1.6 percent in January to a record $148.2 billion, led by record foreign demand for U.S. industrial and consumer goods, as well as food.

However, U.S. shipments to China fell 15.1 percent in January to $5.9 billion. The drop in exports and rise in imports from that country pushed the closely-watched trade gap with China to $20.3 billion, up 8 percent.