October trade gap widens, November import prices jump

By Walker Simon

NEW YORK (Reuters) - The U.S. trade deficit widened slightly more than expected in October as a record price for imported oil outweighed the export-spurring benefits of a weaker dollar, a Commerce Department report showed on Wednesday.

The deficit increased to $57.8 billion in October from a revised estimated of $57.1 billion for September, as the average monthly price for imported oil jumped nearly 6 percent to $72.49 per barrel.

Wall Street analysts had pegged the October trade deficit at $57.2 billion, up from Commerce Department's initial September estimate of $56.5 billion.

Excluding petroleum products, the trade deficit actually shrank in October to $38.5 billion, the lowest since March 2004.

The closely watched U.S. trade deficit with China widened to a record $25.9 billion.

China's share of the U.S. trade deficit is rising. While the overall trade gap is expected to narrow from last year's record, the deficit with China totaled $213.5 billion through October, on pace to surpass the 2006 record of $234 billion.

Overall U.S. imports of goods and services totaled a record $199.5 billion, including a record oil import bill of $29.6 billion. The U.S. trade deficit in petroleum products also swelled to a record $26.3 billion.

The report was more proof that a weak dollar and stronger growth overseas are boosting U.S. exports of goods and services, which rose for an eighth consecutive month to a record $141.7 billion.

During October, the trade-weighted dollar .DXY dollar fell 1.54 percent.

Financial markets showed little reaction to the data.

NOVEMBER EXPORT-IMPORT PRICES

For November, U.S. import prices rose at the fastest pace in 17 years due to surging oil costs, a separate report from the Labor Department showed on Wednesday.

It said rising oil costs helped drive import prices a higher-than-expected 2.7 percent in November, the sharpest gain since October 1990 import prices rose 2.9 percent.

November's sharp import price increase exceeded the Wall Street outlook for a 2 percent rise from October. The Labor Department downwardly revised the October price figure to 1.4 percent from a first-reported 1.8 percent gain.

The report also showed that export prices increased a larger-than-expected 0.9 percent, the biggest rise since April 1995 when they measured 1 percent. Economists had forecast a 0.5 percent increase.