U.S. Trade Deficit Swells To $54 Billion

By Agence France-Presse The U.S. trade deficit boomed to $54 billion in August, the second biggest in history, as the country was swamped by high-priced oil and Chinese-made imports. The total gap grew 6.9% from July to a seasonally adjusted $54.0 billion in August -- $1 billion short of the record posted two months earlier, the Commerce Department said Oct. 14. The scale of the deterioration surprised analysts, who had expected a deficit of about $51.5 billion. "The U.S. trade deficit is above $50 billion for the third month in a row," says CDC Ixis economist Rene Defossez. "Oil is one explanation of this poor performance: since last June, oil prices are on a rapid upward trend. The growth gap between the U.S. and its main trading partners is another explanation." Imports rose solidly, gaining 2.5% to $150.7 billion, but U.S. exports were flat, edging up just 0.1% to $96.0 billion, the Commerce Department said. The huge U.S. deficit with China, meanwhile, appeared set to carry on widening, says Joel Naroff, president of Naroff Economic Advisors. "China is shipping everything they possibly can here and the reality is that their markets are not open enough, broad enough or deep enough to buy enough from us," he said. Rising U.S. exports of consumer goods, autos and civilian aircraft had been offset by a slump in demand for U.S.-made high-technology goods and industrial supplies, said a report by Merrill Lynch senior economist Sheryl King and chief North American economist David Rosenberg. Copyright Agence France-Presse, 2004

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