The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said today in Washington. Total imports and exports were the highest ever.
Americans paid a record $124.66 a barrel for foreign crude oil, more than offsetting increases in shipments of automobiles, aircraft and machinery to buyers overseas. While a weak dollar has made U.S. goods more affordable, shrinking economies in Europe and Japan may stifle export growth in coming months.
Imports climbed 3.9 percent to $230.3 billion in July, reflecting a record $42.6 billion in purchases of crude oil that swelled the deficit with the Organization of Petroleum Exporting Countries. Excluding oil, the trade gap shrank.
The imported-oil bill probably came down in August as prices retreated. A barrel of crude oil on the New York Mercantile Exchange cost an average $117.02 last month, down from $133.77 in July.
Exports increased 3.3 percent to $168.1 billion, led by a $1.4 billion jump in shipments of autos and parts.
In August, prices of goods imported into the U.S. fell by the most in almost two decades of record-keeping as the cost of oil and natural gas dropped, indicating slower economic growth may be starting to calm inflation, according to another report.
The import price index decreased 3.7 percent, more than forecast, after rising a revised 0.2 percent in July, the Labor Department said today in Washington. Outside of oil, costs fell 0.3 percent following a 0.7 percent increase the prior month.
Overseas shipments have received a boost from the 7 percent decline in the dollar against a trade-weighted basket of currencies of major trading partners in the 12 months ended in July. The dollar began to recover in April after dropping 27 percent from February 2002.
After adjusting for inflation, the trade deficit grew to $41.2 billion from $40.1 billion in June that was larger than previously estimated. The figures, which are used to calculate gross domestic product, indicate the government may lower the second-quarter growth estimate when the final data is reported later this month.
July's price-adjusted deficit was smaller than the average for last quarter, indicating trade will again boost growth in the third quarter.
The smallest trade deficit in eight years was the biggest contributor to the 3.3 percent pace of economic expansion last quarter. The narrower gap added 3.1 percentage points to growth, the most since 1980, the Commerce Department said Aug. 28. Excluding trade, the economy would have expanded at a 0.2 percent pace after growing 0.1 percent in the first three months of the year.
The trade gap with China widened to $24.9 billion from $21.4 billion in the prior month. The deficit with the OPEC jumped 34 percent to a record $24.2 billion.
Some U.S. manufacturers have taken advantage of the competitive dollar. Boeing Co., the world's second-biggest aircraft maker, received bookings for 70 new planes in July, up from 62 placed in June. Fifty of the Chicago-based company's July orders came from abroad.
A machinist's strike this month could prevent Boeing from filling those orders in coming months, further threatening U.S. export growth. In the past, work stoppages by members of the company's largest union, the International Association of Machinists and Aerospace Workers, have lasted four to 10 weeks.