Imports, Exports Set Records as Deficit Swells

Washington, DC, Sept. 11, 2008--The U.S. trade deficit rose in July to the highest level in 16 months as oil imports hit an all-time high, offsetting strong export growth. The deficit with China climbed to the second highest level on record.

The Commerce Department reported Thursday that the deficit rose by 5.7 percent to $62.2 billion in July, much worse than the $58 billion deficit that Wall Street expected.

The trade deterioration reflected the fact that crude oil prices hit a record in July, pushing America's foreign oil bill to an all-time high of $51.4 billion, up 13.7 percent from June.

The big rise in oil prices, with the average barrel of imported crude jumping to a record $124.66, pushed overall imports up by 3.9 percent to a record $230.3 billion.

That increase offset another strong showing for U.S. exports which rose by 3.3 percent to a record $168.1 billion, reflecting big gains in overseas sales of commercial aircraft, computers and U.S.-made cars.

Exports have been the major bright spot for the U.S. economy in a year when the country has been battered by a prolonged slump in housing, rising unemployment and a severe credit crunch.