WASHINGTON -- The U.S. trade deficit edged down slightly in August, reflecting a drop in foreign oil from record levels. But the politically sensitive deficit with China increased as imports from that country hit an all-time high.
The Commerce Department said Friday that the trade deficit declined 3.5% in August to $59.1 billion. The deficit is expected to shrink even further in coming months as a severe economic slump in the U.S. depresses demand for oil and other imported goods.
Imports fell 2.4% to $223.9 billion, also the second-highest on record. Imports of consumer goods and food, feeds and beverages set category records.
America's foreign oil bill declined to $43.7 billion in August, down a record $7.3 billion from the all-time high of $51 billion in July. The drop reflected both lower shipments and oil prices.
Exports fell 2% in August, the biggest one-month drop in more than four years, but were still the second-highest on record at $164.7 billion. Exports of capital goods and petroleum set records in August.
A report from the Labor Department said Friday that U.S. import prices experienced the largest one-month decline in five years in September, dropping 3%, even though they rose 14.5% over the last year.
Oil import prices, which fell 9%, were the chief factor, the department said. That was the largest monthly drop for oil import prices since October 2006, and followed an 8.2% decrease in August.
U.S. export prices also dropped a sharp 1.0% in September, the second month in a row exports have declined after they rose for 21 months straight, the Labor Department said.
Non-agricultural export prices saw their biggest decrease — of 1% — since the department began keeping records in 1998, primarily due to shrinking prices for gold, metals and fuel oil. Prices for consumer goods exports also fell, by 0.3%, which was the largest decline since they slid 0.4% in February 2002.