U.S. Trade Deficit Jumps on Surging Demand for Oil

The U.S. trade deficit jumped to the second-highest level in history as surging demand for foreign oil swamped a small gain in U.S. exports, the government reported Thursday.

America’s trade gap with China hit an all-time high as retailers stocked up on cellphones, toys and televisions for holiday sales.

The worse-than-expected trade performance in August -- a deficit of $54 billion -- represented a 6.9% widening from July’s trade gap of $50.5 billion. The record monthly deficit was set in June at $55 billion.

Exports, helped by a rise in shipments of commercial aircraft and record foreign sales of American cars and auto parts, rose by 0.1% to $96 billion in August.

However, this improvement was overwhelmed by a 2.5% surge in imports to a record $150.1 billion as America’s foreign-oil bill climbed to the highest level in history. The average price for crude oil jumped to a 23-year high of $36.37 a barrel.

Analysts said the bad news on trade would get only worse in coming months given that oil prices had continued to soar, with crude oil hitting a record of $54.76 a barrel Thursday.

“The skyrocketing oil prices are sucking the wind out of the economy,” said Joel Naroff, chief economist at Naroff Economic Advisors.

In a second economic report, the Labor Department said the number of Americans filing new claims for unemployment benefits rose by 15,000 last week to a seasonally adjusted level of 352,000. The four-week moving average of claims, which smooths out weekly changes, rose by 4,000 to a seven-month high of 352,000.

In August, the trade deficit with China climbed to $18.1 billion as U.S. retailers stocked their shelves for the holiday shopping season.