By Vicki Needham - 10/14/10 05:51 PM EDT
The trade deficit widened sharply in August as imports got a boost from businesses ramping up for a possible increase in consumer spending.
The deficit decreased 8.8 percent, to $46.3 billion, as a slight increase of 0.2 percent in exports was overtaken by a 2.1 percent jump in imports, the Commerce Department reported Thursday.
The trade deficit is running at an annual rate of $502.5 billion this year, up 34 percent from the $374.9 billion deficit for all of 2009, which had been the smallest deficit since 2003.
Exports rose to $153.9 billion, the highest level in two years, boosted by sales of computers, autos and farm goods. Sales of commercial aircraft had boosted exports in prior months, but August saw large declines in that sector.
Meanwhile, imports increased to $200.2 billion behind a jump in demand for foreign food products, which hit an all-time high of $7.8 billion.
Imports of petroleum products rose 3.5 percent, to $27.6 billion, their highest level since April. The average price for crude oil increased to $73.47 a barrel, up from $72.09 in July and the highest price since May.
The trade deficit with the Chinese also reached an all-time high of $28 billion, eclipsing the previous high of $27.9 billion in October 2008, as lawmakers from both parties continue to call on the Obama administration to get tougher with China on trade and currency issues.
For the year, the trade deficit with China is running 20.6 percent above last year's levels, the largest deficit the U.S. has with any country.
The White House has been pressuring China to let its currency appreciate.
Before leaving for the recess, the House passed a bill that puts sanctions on countries that manipulate their currencies to gain an advantage with trade. The Senate has said it would take up the bill during the lame-duck session, which begins Nov. 15.
Trade has been a drag on the economy, pulling down growth more than expected as global demand has not met economists' expectations to boost exports.
The administration could release a trade report on Friday about currency manipulation problems and whether those actions provide an unfair advantage to certain countries.