U.S. trade deficit is at widest in 3 years

WASHINGTON - The U.S. trade deficit surged in January to the widest imbalance in more than three years after imports grew faster than exports.

Rising oil prices helped drive imports to a record high, as did stronger demand for foreign-made cars, computers, and foods. And exports to Europe fell, a sign that the region's debt crisis could temporarily weaken U.S. growth just as the job market is strengthening.

The January trade deficit widened to $52.6 billion, the Commerce Department reported Friday. That's up from a revised $50.4 billion in December and was the biggest gap since October 2008.

Imports rose 2.1 percent to a record $233.4 billion. Exports were up a smaller 1.4 percent to $180.8 billion. Exports to Europe fell 7.5 percent.

"There is little good news in January's trade figures," said Paul Dales, senior U.S. economist at Capital Economics.

Dales blamed much of the increase on higher oil prices, which drove oil imports up 3.3 percent. Nonetheless, he said the wider deficit was likely to slow economic growth in the January-March quarter to an annual rate of 1 percent.

Growth should improve later in the year, he said, because a surge in hiring is likely to boost consumer spending.

A separate Commerce report showed that wholesale companies kept building stockpiles in January. Sales, however, dipped for the first time since May. Business restocking was a major driver of economic growth at the end of last year. Economists say that is likely to slow in the first quarter, another reason they expect weaker growth.

A wider trade deficit weighs on growth because it means Americans are spending more on foreign-made goods than overseas consumers are spending on U.S.-made goods.

Economists predict the trade deficit this year will widen from last year's $560 billion imbalance. A key reason is that they expect U.S. companies to sell fewer goods in Europe, which represents about 20 percent of America's export market.

"While the U.S. economy is picking up steam, the rest of the world is not. So we are importing a lot more," said Joel Naroff, chief economist with Naroff Economic Advisors.

U.S. consumers helped drive the deficit higher by buying more foreign cars.