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October 14, 2004
Trade Deficit Surges, Jobless Claims UpBy THE ASSOCIATED PRESS
Filed at 8:47 a.m. ET
WASHINGTON (AP) -- The U.S. trade deficit, propelled by a record foreign oil bill, surged to $54 billion in August, the second highest level in history. The politically sensitive deficit with China hit a new high as American retailers upped their orders for cell phones, toys and televisions.
The Commerce Department said the August trade deficit in goods and services was 6.9 percent higher than a $50.5 billion imbalance in July. A small 0.1 percent rise in exports was dwarfed by a 2.5 percent jump in imports.
For the year, America's trade deficit is running at a record annual rate of $590 billion, 19 percent higher than the previous record, last year's $496.5 billion imbalance.
Imports climbed 2.5 percent to a record $150.1 billion in August, reflecting a 12.2 percent jump in petroleum shipments, which rose to a record $15.6 billion last month.
U.S. exports edged up 0.1 percent to $96 billion in August following an even larger 3 percent gain in July. Economists are hoping that an improving global economy will lift sales of American goods overseas. Sales of American cars and auto parts did hit a record, rising to $7.8 billion in August.
The U.S. trade performance has become an issue in the presidential race with Democratic challenger John Kerry charging that President Bush has not done enough to protect American workers from unfair trade practices from low wage countries such as China.
In Wednesday night's final debate, Kerry criticized Bush for failing to pursue an unfair trade practice complaint against China on the grounds that it has rigged its currency system to keep the yuan undervalued by as much as 40 percent against the U.S. dollar, giving Chinese products a huge competitive advantage against American goods.
In a second economic report, the Labor Department said the number of Americans filing new claims for unemployment benefits rose by 15,000 last week to a seasonally adjusted level of 352,000. The four-week moving average of claims, which smooths out weekly changes, rose by 4,000 to a seven-month high of 352,000.
The report on jobless claims reflects a labor market that is continuing to confound economists' expectations. The country added a lower-than-expected 96,000 jobs in September as the unemployment rate held steady at 5.4 percent.
In August, the trade deficit with China climbed to a record $18.1 billion, pushed higher by a surge in demand for cell phones, toys and games, televisions and VCRs, reflecting efforts by U.S. retailers to stock their shelves in advance of the holiday shopping season.
The administration accuses Kerry of being an ``economic isolationist'' and argues that its policy of pushing to open foreign markets by negotiating free-trade agreements with other nations represents the best approach to keeping America competitive in a global economy.
However, the nation has lost 2.7 million manufacturing jobs over the past four years and some sectors vulnerable to foreign trade such as textiles have been particulary hard hit.
A coalition of textile groups asked the administration on Tuesday to limit imports of textiles from China , timing the filing of its case to force the administration to make a preliminary ruling by Nov. 1, the day before the election.
The nation's total foreign oil bill was driven higher in August by increased volume and higher prices. The average price for crude oil jumped to a 23-year high of $36.37 per barrel, up by $3.09 per barrel from July. Imported oil is likely to climb even higher in coming months reflecting rising oil prices that are now at record levels above $50 per barrel.
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