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U.s. Trade Deficit Widens, Though Exports Grew

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The United States trade deficit widened in December to its highest level in four months, the government said on Friday, and the annual trade gap expanded nearly 33 percent in 2010 as imports from China hit record levels.

The December trade deficit grew nearly 6 percent from the previous month, to $40.6 billion, just slightly higher than a consensus estimate of Wall Street analysts as the average price for imported oil rose to its highest level since October 2008.

Overall imports of goods and services were also their highest since October 2008, in a sign that consumers and businesses are spending more as the economy picks up steam.

Exports of goods and services were the highest since July 2008, the month that they hit their peak before beginning a precipitous drop caused by the global financial crisis.

The export of goods to China grew to a record $10.1 billion in December and also were a record $91.9 billion for the year.

But that strong finish was swamped by record imports from China of $364.9 billion for the entire year, which pushed the closely watched trade gap with that country to a record $273.1 billion.

Rising oil prices also helped widen the trade deficit in 2010. The average price for imported oil jumped to $74.66 a barrel, from $56.93 in 2009.

Imports of consumer goods and foods, feeds and beverages also set records in 2010.

Over all, American imports of goods and services grew 19.7 percent in 2010 to $2.33 trillion dollars.

Exports grew 16.6 percent to $1.83 trillion, a pace that if maintained would allow the United States to reach President Obama’s goal of doubling exports by 2013.

Exports of services, industrial supplies, consumer goods and petroleum all set records.

The strong services performance pushed the United States trade surplus for services to a record $148.7 billion in 2010.

So exports are growing for the US but it's still importing at a faster rate than it can export. The US trade gap just keeps getting bigger and bigger.

The magic service sector creating a surplus, it's not going to take much more for it grow and close the trade gap completely...

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