Oil, Textiles Boost Trade Deficit
The U.S. trade deficit increased in August to its third-highest level on record as imported oil costs and imports of Chinese textiles and other goods hit unprecedented levels, the government said Thursday.
Surging energy prices in September prompted the biggest rise in import prices in nearly 15 years, a separate report showed.
The Commerce Department said the August trade gap grew 1.8% to $59 billion, just below economists’ forecasts of $59.5 billion. Record imports of $167.2 billion easily overwhelmed record exports of $108.2 billion.
Much of the climb in the trade gap was attributable to oil price gains, partly offset by a surge in civilian aircraft exports.
“Since the order books at [aircraft maker] Boeing are bulging at the moment, with many of those orders coming from abroad, aircraft exports could continue to be a big positive for the trade deficit for some time to come,” Paul Ashworth, senior international economist at Capital Economics in London, wrote in a report.
The trade report showed that imported oil reached a record $52.65 a barrel, lifting the total for crude oil imports to a record $17.2 billion in August.
A separate Labor Department report showed that surging oil and natural gas prices pushed import prices up 2.3% in September, the largest increase in nearly 15 years and more than twice expectations.
Petroleum import prices jumped 7.3%, and nonpetroleum import costs rose by a record 1.2%, the Labor Department said. Stripping out petroleum and natural gas, import prices rose a much smaller 0.4%.
Kurt Karl, head of economic research and consulting at Swiss Re in New York, said the high oil prices masked an improvement in the underlying trade gap.
“We do see some light at the end of the tunnel for a turnaround of the current account deficit, but it won’t show up until we get some petroleum price relief,” Karl said.
Imports from China hit a record $22.4 billion, boosted by a 3.1% jump in clothing and textile shipments.
Imports of those products in the first eight months of this year are up more than 53% from the same period a year earlier. Global textile quotas ended Jan. 1.
The Commerce Department’s trade report showed little initial effect from Hurricane Katrina, which forced the temporary closure of the Port of New Orleans after it hit Aug. 29. The department will publish preliminary September trade data Oct. 21 for Gulf Coast ports.
Another report showed that the number of Americans filing new unemployment claims declined by 2,000 last week, a smaller fall than expected in the aftermath of the gulf hurricanes.
Initial applications for state unemployment insurance benefits fell to a seasonally adjusted 389,000 in the week ended Saturday from a revised 391,000 the previous week, the Labor Department said.
A Labor Department analyst said about 75,000 first-time claims last week -- not adjusted for seasonal factors -- were linked to hurricanes Katrina and Rita, bringing the cumulative effect of the storms to about 438,000 claims since early September.
