Washington, DC, September 13, 2005—The U.S. trade deficit declined slightly in July even though oil imports climbed to an all-time high.
The Commerce Department reported that the July trade gap fell by 2.6 percent to $57.9 billion from an imbalance of $59.5 billion in June, the second highest deficit on record.
Analysts believe the July improvement will be short-lived — given that oil prices continued to soar in August, reflecting the impact of Hurricane Katrina on oil production in the Gulf of Mexico.
So far this year, the country's trade deficit is running at an annual rate of $693.1 billion, far ahead of last year's record imbalance of $617.6 billion. Economists believe the deficit will worsen even more in 2006 as soaring oil prices continue to transfer more U.S. dollars into the hands of foreigners.
