US trade deficit widens during August

The US trade deficit widened 1

The US trade deficit widened 1.8 per cent in August to its third-highest level on record as oil import prices hit a new high, and imports of textiles and other goods from China also set a record.

The August trade gap totalled $59 billion, just below a median $59.5 billion estimated by economists before the Commerce Department report.

Record imports of $167.2 billion easily overwhelmed record exports of $108.2 billion. The slightly lower-than-expected deficit pushed the dollar higher in early trading after the report.

US Treasury Secretary John Snow in is China for meetings this weekend with finance ministers and central bankers from the Group of 20 rich and emerging-market countries.

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Mr Snow has been vocal about the need for China to move to a more flexible exchange rate policy for the yuan.

A second US report showed the number of Americans filing new jobless claims dipped 2,000 last week, much less than Wall Street analysts had expected in the aftermath of Gulf Coast hurricanes.

First-time claims for state unemployment insurance benefits fell to a seasonally adjusted 389,000 in the week ended October 8th from a slightly revised 391,000 the prior week, the Labor Department said.

Economists had expected new claims to fall to 360,000 from the original October 1st week reading of 390,000, a total swollen by hurricane-related claims.

The trade report showed oil import prices increased for the third consecutive month to a record $52.65 per barrel, lifting imports from Opec countries to a record $11.9 billion.

Overall crude oil imports were $17.2 billion in August - also a record. Surging oil and natural gas pushed overall import prices up 2.3 per cent in September, the largest advance in nearly 15 years and more than twice expectations, a third report showed.

Petroleum import prices jumped 7.3 per cent, hitting a record level for the fourth straight month, while non-petroleum import costs rose by a record 1.2 per cent, the Labor Department said.