U.S. Trade Deficit Hits Record $763.6 Billion

Oil prices and trade deficit with China, chief causes.

The trade deficit surged to a record $763.6 billion in 2006 owing to new highs for oil prices and the country's commercial shortfall with China, the Commerce Department said on Feb. 13.

The December gap alone was $61.2 billion, up from $58.1 billion in November. It was the highest monthly total since September's $64.4 billion.

The annual figure was up from $716.7 billion in 2005, registering the fifth consecutive year of a record as oil prices struck new highs above $78 in mid-2006. Still, the rise in the annual deficit was only 6.5%, an improvement over the double-digit gains of the four previous years.

Exports rose 12.8% last year to $1.438 trillion while imports grew 10.5% to $2.201 trillion.

The deficit with China grew to a new high of $232.5 billion in 2006, up from $201.5 billion the year before.

The annual deficit with Japan also hit a new high at $88.4 billion, up 7.2%, which in turn is likely to intensify criticism among lawmakers about the yen's weakness against the dollar.

But against the EU, the deficit fell 4.7% to $116.6 billion over a year that saw the euro strengthen sharply against the dollar. And with Canada, the trade gap fell 7.2% to $72.8 billion.

One of the few bright spots in last year's trade picture was services, which registered their highest surplus since 2000 at $72.5 billion.

Copyright Agence France-Presse, 2007

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