WASHINGTON (AP) — The U.S. trade deficit surged to the widest imbalance in more than three years in January as imports hit an all-time high, reflecting big demand for foreign-made cars, computers and food products.
U.S. exports to Europe fell, raising concerns that the debt crisis in that region could dampen U.S. economic growth.
The January trade deficit widened to $52.6 billion, the biggest gap since October 2008, the Commerce Department reported Friday. Imports rose 2.1 percent to a record $233.4 billion. Exports were up a smaller 1.4 percent to $180.8 billion. Exports to Europe fell 7.5 percent.
Economists are looking for the deficit this year to widen from last year's $560 billion imbalance, reflecting in part the economic woes in Europe, which represents about 20 percent of America's export market. A wider deficit can depress economic growth because it usually means fewer export-related jobs.
A National Association for Business Economics forecasting panel has projected that the deficit for 2012 will narrow by 4.1 percent to $535.4 billion and will edge down further to $525 billion in 2013 as growth in exports keeps pace with import increases.
The economy grew at an annual rate of 3 percent in the final three months of 2011. For all of 2011, the economy expanded by just 1.7 percent, roughly half the rate in 2010. The NABE forecasting panel expects growth to improve to 2.3 percent this year and accelerate to 2.8 percent in 2013.
In January, the politically sensitive deficit with China rose 12.5 percent to $26 billion. Last year, the deficit with China hit a record $295.5 billion, the highest deficit ever recorded with a single country.
At a time of high unemployment in the United States, political pressure is growing to impose economic sanctions on what critics see as China's unfair trade practices such as a currency regime that keeps the yuan undervalued against the dollar, making Chinese goods cheaper in U.S. markets and American products more expensive in China.
The deficit with the 27-nation European union dropped 11.7 percent to $8.5 billion in January but that occurred because European imports fell 8.7 percent, offsetting a 7.5 percent drop in U.S. exports to Europe. Economists are worried that a severe recession in that region resulting from a prolonged debt crisis will crimp U.S. exports.
The rise in imports in January reflected a 3.3 percent increase in petroleum imports to $39.1 billion and a 10.4 percent increase in imports of autos and auto parts, which hit an all-time high of $25.3 billion. Imports of capital goods such as computers and industrial machinery also hit a record at $44.7 billion. Imports of food products also hit a record high of $9.6 billion with demand for foreign-produced fish, meat, bakery products and wine and beer all rising.
The increase in exports reflected records in several categories with exports of U.S. made cars and auto parts setting a record at $12.7 billion and exports of U.S. made capital goods, a category that includes computers, aircraft and telecommunications equipment, setting a record at $43.2 billion.