Trade deficit widens to $44.4 billion

By Vicki Needham - 03/07/13 10:22 AM ET

The nation's trade gap widened in January, pushed up by a large jump in oil imports.

The monthly deficit increased to $44.4 billion, up 16.5 percent from the revised $38.1 billion in December, driven by a more than 12 percent increase in oil imports, the Commerce Department reported on Thursday.

Exports were $184.5 billion, down about 1.2 percent, while imports rose 1.8 percent to $228.9 billion from $224.8 billion in December.

"We have begun to see some signs of improvement in many of our largest trading partners, with the major exception of the Eurozone as a whole," said Chad Moutray, chief economist for the National Association of Manufacturers (NAM).

"Exports are critically important to creating manufacturing jobs," he said in a blog post on Thursday.

"Manufacturers are looking to policymakers in Washington move forward with a robust trade agenda that will help open more markets to U.S. manufactured goods exports. If we continue the rest of the year with slow export growth similar to January we won't reach the goal of doubling exports."

Not counting oil, the trade gap remained steady at $20.1 billion, up only slightly from $19.5 billion in December.

"Given the extent to which the trade balance fell in December, the change in January is more dramatic than it is in reality," Moutray said.

"The bulk of the shift was due to higher petroleum costs. Non-petroleum exports and imports were not dramatically different than they were in December."

Last year's deficit was revised down slightly to $539.5 billion, a drop of 3.6 percent from 2011.

The deficit with China was $27.8 billion, up from $24.5 billion, an increase of 13.6 percent.

There are mixed opinions about how to deal with what many business groups say is China's currency manipulation that is giving them an advantage in international trade.

U.S. trade officials have vowed to be tougher on China.

"The rising trade deficit with China is not a good sign for reshoring of manufacturing jobs," said Scott Paul, president, for the Alliance for American Manufacturing (AAM).

AAM recently released a report on manufacturing that includes a section on trade policy.

The plan addresses China's undervalued currency, which AAM argues is distorting trade and strong enforcement of U.S. trade laws.

It also calls on President Obama to press for the prohibition of currency manipulation ahead of any potential Trans-Pacific Partnership agreement.

This post was updated at 3 p.m.