- The Washington Times - Thursday, October 14, 2004

ASSOCIATED PRESS

The trade deficit increased to the second-highest level in history as surging demand for foreign oil swamped a small gain in U.S. exports, the government reported yesterday. America’s trade gap with China reached a new high as retailers stocked up on cell phones, toys and televisions in preparation for Christmas sales.

The worse-than-expected trade performance in August — a deficit of $54 billion — was a 6.9 percent 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 a slight 0.1 percent to $96 billion in August.

However, this improvement was overwhelmed by a 2.5 percent 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 per barrel.



Analysts said the bad news on trade will only get worse in coming months given that oil prices have continued to soar, with chief economist at Naroff Economic Advisors.

“And the worst is yet to come.”

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 smoothes out weekly changes, rose by 4,000 to a seven-month high of 352,000.

The jobless claims report reflects a labor market that is continuing to disappoint economists’ expectations.

The country added a lower-than-expected 96,000 jobs in September as the unemployment rate held steady at 5.4 percent.

The economy raced ahead at a 4.5 percent growth rate in the first three months this year before slowing to a 3.3 percent growth rate in the April-June quarter as surging oil prices sent the trade deficit soaring and took a big bite out of consumer spending.

For the year, America’s trade deficit is running at an annual rate of $590 billion, 19 percent higher than the previous high, last year’s $496.5 billion imbalance.

Democrats contend that President Bush’s economic policies have pushed the country back into a period of twin deficit troubles with the economy buffeted by runaway federal budget deficits that increase domestic demand and send the trade deficit soaring.

Democratic presidential challenger Sen. John Kerry has pointed to the string of record trade deficits run up since Mr. Bush took office as evidence that the administration has failed to protect American workers from unfair trade practices engaged in by low-wage countries such as China.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

 

Click to Read More and View Comments

Click to Hide