U.S. Jan trade gap widens on surging imports

The U.S. trade deficit widened much more than expected in January to $46.3 billion, as surging imports of oil, capital goods and cars overpowered record ex 536870913 1886351988

Analysts had expected the trade gap to grow moderately to $41.5 billion, from a revised estimate of $40.3 billion in December. The closely watched trade gap with China also widened in Jan 536870913 1969320569

 

Led by higher oil prices, U.S. imports of goods and services leapt 5.2 percent in January to $214.1 billion for the largest month-to-month gain since March 1993.

 

The strong growth was a sign of improved U.S. demand, but the bigger-than-expected gap could prompt analysts to scale back their estimates of first-quarter U.S. economic growth.

 

The average price for imported oil soared to $84.34 per barrel, the highest since October 2008, and imports from the Organization of Petroleum Exporting Countries (OPEC) also rose to the h 536870913 1768384613

 

Imports of capital goods, such as industrial machinery, engines and medicinal equipment, hit a record $41.7 billion while imports of foods, feeds and beverages were a record $8.5 billion.

 

Car imports were the highest since February 2008. U.S. exports of goods and services grew 2.7 percent to a record $167.7 billion, with both exports of goods and exports of services at record highs.

 

The previous record of $165.7 billion was set in July 2008, just before the global financial crisis which caused world trade to plummet.

 

Despite export growth to the rest of the world, U.S. exports to China fell more than 20 perent in January to $8.1 billion while U.S. imports from China grew slightly to $31.4 billion.

 

That resulted in a bilateral U.S. trade deficit of $23.3 billion during the month that Chinese President Hu Jintao was in the United States for talks with President Barack Obama.

 

The trade deficit with China is a sore point in relations and both sides have promised steps

Source: http://www.reuters.com/article/idUSCAT00539120110310