Trade Deficit Jumps Up in November

The U.S. trade deficit surged to the highest level in 14 months in November even thought the deficit with China declined slightly while the weak dollar boosted exports to another record high. The gain mostly reflecting record imports of foreign oil. The Commerce Department reported that the imbalance between imports and exports jumped by 9.3% to $63.1 billion. The increase was driven by a 16.3% surge in America's foreign oil bill, which climbed to an all-time high of $34.4 billion as the price of imported crude hit new records. To make matters worse, analysts are forecasting higher oil bills in future months. The big surge in oil pushed total imports of goods and services up by 3% to a record $205.4 billion. Exports also set another record, rising 0.4% to $142.3 billion. Export demand has been growing significantly over the past two years as U.S. manufacturers and farmers have benefited from a weaker dollar against many other currencies. That makes U.S. goods cheaper on overseas markets. The November deficit with China dipped slightly to $24 billion, but that was down from a record high of $25.9 billion set in October. Through the first 11 months of 2007, the deficit is running at an annual rate of $709.1 billion, down 6.5% from last year's all-time high of $758.5 billion. Analysts believe the export boom will mean a decline in the trade deficit in 2007 after five straight record years.

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