The US trade deficit widened to a record $46 billion in March, underscoring the fact that the US's strong growth is intensifying imbalances in the global economy.
Higher oil prices and the ever-growing appetite among consumers for foreign goods drove the US import bill up 4.6 per cent to $140.7 billion, its fastest monthly increase since 1993.
The data weakened the dollar, which had risen in recent days as a result of growing expectations that interest rates may rise sooner than expected after strong jobs data last week. "This has reminded the market that the US needs to attract a prodigious amount of overseas capital to avoid further falls in the dollar," said Mr Marc Chandler, head of US currency research at HSBC.
The $3.9 billion surge in the trade deficit will dampen expectations that US growth was stronger in the first three months of the year than the 4.2 per cent initially reported. The bigger deficit looks likely to offset the positive effect of stronger construction spending and rising inventory levels.
A shoppers' binge on overseas goods was largely to blame, with total imports of consumer goods rising by $2.6 billion to $31.3 billion. "This reminds us that the US consumer remains the main locomotive of the world economy," said Mr Nigel Gault, head of US economic research at Global Insight.
"But the price of this is growing imbalances in the world economy."
Forecasts released this week by the Organisation of Economic Co-operation and Development echoed the prevailing view that the US will continue to outpace other developed economies this year. The OECD predicts growth of 4.7 per cent in the US, compared with 3 per cent in Japan and 1.6 in the euro zone.
But the growing deficit is not just a sign of healthy demand but also of high oil prices that tend to increase inflation and depress growth. Imports of oil products rose by $1.6 billion to $13.8 billion and economists said worse was to come.
The price of a barrel of oil imported in March was $30.64 compared with $29.17 in the previous month. Yesterday, the price of West Texas intermediate - which is slightly more expensive than the oil imported by the US - hit a 13-year-high of more than $40 for the June contract.
Mr Michael Lewis, head of commodities research at Deutsche Bank, said oil prices could go even higher. "Not only do we have very high world demand for oil, we have a high geo-political risk and the non-OPEC (Organisation of Petroleum Exporting Countries) supply of oil is also falling," he said.
The surge in the oil price has helped lay to rest concerns that inflation will fall further, with economists awaiting the release of the consumer price index on Friday for possible evidence. International stock markets fell back again yesterday, with Dublin down 1.3 per cent. On Wall Street last night, the Dow Jones closed up 25.69 at 10,045.16 - (Financial Times Service)
