By Vicki Needham - 05/12/10 03:20 PM EDT
The U.S. trade deficit hit a 15-month high in March behind rising prices of imported oil and demand picked up for goods from overseas, signals that the nation's economy is emerging from the protracted recession.
The gap widened to $40.4 billion, up 2.5 percent in March, on track with economists' expectations, the biggest monthly deficit since December 2008, according to Commerce Department figures released Wednesday.
The deficit got a positive reaction from Wall Street with the Dow Jones Industrial Average up about 1 percent this morning.
Exports rose 3.2 percent to $147.9 billion, the highest level since October 2008 while imports were up 3.1 percent to $188.3 billion. Demand for crude oil imports reached their highest level since fall of 2008.
The deficit increased from a revised $39.4 billion in February, as March exports and imports were up over February's totals. March exports were $4.6 billion more than February's numbers and imports were up $5.6 billion.
A 25.5 percent increase in crude oil shipments led to the rise in imports, up $22.3 billion in March, reflecting greater demand and higher prices.
Economists are still keeping a close eye on the European debt crisis, which could dampen export forecasts. Greece only accounts for 0.2 percent of U.S. exports but combined, 16 European nations account for 15 percent of American exports, including Greece.
The U.S. trade deficit with China widened to $16.9 billion in March, up 2.4 percent, the largest of any country. Congress and the Obama administration are considering trade sanctions if China doesn't revalue its currency to rise in value against the dollar.