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Record imports widen U.S. trade gap

/ Source: Reuters

The U.S. trade deficit widened in September to $41.3 billion, as the strengthening U.S. economy propelled imports from China and the rest of the world to record levels, the government said on Thursday.

The trade gap was slightly larger than the mid-point estimate of $40.5 billion from analysts surveyed before the report. The deficit widened for the first time in six months as surging imports outstripped the biggest increase in exports in over three years, the Commerce Department said.

Imports of goods and services totaled $127.4 billion. The 3.3 percent jump was led by higher imports of cars, auto parts and capital goods, including computer accessories and civilian aircraft. Imports of services also set a record at $21.1 billion.

Although overshadowed by the record imports, exports jumped to $86.2 billion in September, the highest level since May 2001. The 2.8 percent month-to-month gain was the highest since June 2000. Services exports set a record at $26.3 billion.

The politically sensitive U.S. trade deficit with China set a record in September at $12.7 billion, as imports from the Asian giant hit $14.8 billion, also a record.

The trade deficit with China totaled $89.7 billion for the first nine months of the year, on track to surpass the record of $103 billion set in 2002.

The Bush administration has been under pressure from Congress to narrow the trade gap with China. Since August, China has been buying large amounts of U.S. soybeans and cotton. On Wednesday, China signed a deal to purchase commercial jets from Boeing, along with jet engines from General Electric.