US trade deficit widens further

Foreign imports of oil into the US are continuing to grow

The US trade deficit has hit a new monthly high of $68.5bn (£39.3bn), with imports of oil and cars continuing to grow significantly.

January's deficit was 5% higher than a month earlier and exceeded the previous record of $67.8bn seen last October.

The figures make gloomy reading for the Bush administration after the deficit hit an annual high of $723.6bn in 2005.

The value of imports rose 3.5% to $182.9bn, eclipsing a 2.5% rise in US exports to $114.4bn.

Costly oil

Economists said the figures pointed to the annual deficit rising above $800bn in 2006.

The increased cost of oil imports helped fuel the deficit rise, according to figures released by the Commerce Department.

You can't blame it all on energy, because the trade deficit excluding petroleum rose faster than the overall deficit Michael Sheldon, Spencer Clarke

The trade shortfall with Opec, the oil producers' organisation, rose by more than 11% to $8.4bn.

However, imports of a wide range of consumer and industrial goods, including food industrial supplies and cars, also hit record levels.

"You can't blame it all on energy, because the trade deficit excluding petroleum rose faster than the overall deficit," Michael Sheldon, chief market strategist at stockbrokers Spencer Clarke told Reuters.

The deficit with China continues to grow amid persistent calls by Washington for China to further revalue its currency.

The US trade gap with China rose 9.9% to $17.9bn.