US August trade deficit widens 2.7 pct to record 69.9 bln usd

The US trade deficit struck a new record in August as the shortfall with China rose to its highest level ever, the Commerce Department said Thursday. The trade deficit widened 2.7 pct to a record 69.9 bln usd in August, compared with a 66.5 bln usd deficit economists had expected. The department's estimate for July's trade deficit remained at 68 bln usd. The trade deficit with China rose 12.2 pct to a record 22 bln usd, as imports rose 8.5 pct to a record 26.7 bln usd. Total oil imports in August rose 3.7 pct to a record 29.7 bln usd as the average price per barrel of crude oil rose 1.28 usd to a record 66.12 usd. Total imports rose 2.4 pct to 192.3 bln usd in August, while total exports rose 2.3 pct to 122.4 bln usd. For the year, the trade deficit is running at an annualised 784.2 bln usd pace, 9.4 pct higher than last year's deficit of 716.7 bln usd.

America's trade deficit hit an all-time high as record imports of oil swamped a solid gain in U.S. exports. The politically sensitive deficit with China set a record, a point that Democrats are sure to use in attacking President Bush's trade policies in the closing weeks of the battle for Congress. The deficit rose to $69.9 billion in August, up 2.7 percent from July's $68 billion deficit, which had also been a record. The sharp deterioration in the deficit in recent months has occurred because soaring global oil prices have pushed America's foreign oil bill to historic highs. Analysts believe the deficit will begin to show improvements in coming months, reflecting the fact that oil prices, which had surged to $77 per barrel in July, have fallen by about 25 percent since that time. In a second report, the number of newly laid off workers filing for unemployment benefits rose by 4,000 last week to a seasonally adjusted total of 308,000. The widening trade gap occurred even though U.S. exports of goods and services set a record, rising by 2.3 percent to $122.4 billion. This increase, however, was offset by a 2.4 percent rise in imports, which also set a record at $192.3 billion. The trade deficit is on track to set a record for a fifth consecutive year, running at an annual rate through August of $784.2 billion, 9.4 percent higher than last year's $716.7 billion record. Democrats, campaigning to wrest control of Congress from the Republicans, contend that the string of record deficits documents failures of Bush administration trade policies that they contend have not addressed unfair trade practices by other nations, particularly China.