Thursday, October 12, 2006

"The economy is strong." - G.W. Bush

Trade Deficit Hits Record High

By Howard Schneider
Washington Post Staff Writer
Thursday, October 12, 2006; 10:20 AM

The U.S. trade deficit rose to a record $69.86 billion in August, driven by high oil prices, a growing trade gap with China, and rising consumer demand for imported goods from antiques to appliances.

The record deficit represents a 2.7 percent increase over July, and it came despite growth in U.S. exports. American companies sold $122.4 billion worth of goods and services overseas in August, an increase of $2.7 billion over the previous month that was led by sales of agricultural products and aircraft.

However, American companies and consumers bought far more from abroad, with imports rising to $192.3. That included $20.8 billion worth of crude oil, as demand remained strong even in the face of record prices that touched $77 per barrel over the summer.

Although policymakers had hoped the trade gap would moderate this year, after setting a full-year-record of $716 billion in 2005, that now appears a distant possibility: through August, the country had spent $522 billion more on imports than it sold abroad, on pace for another record.

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