U.S. Trade Deficit Exceeds $12 Billion

America’s trade deficit soared to $12.7 billion in January as higher oil prices, increased auto imports and a surge of Chinese toys and shoes gave the country its worst imbalance in goods in history.

The Commerce Department reported Thursday that the overall deficit was up 21 percent from $10.5 billion in December.

The deficit for all of 1996 totaled $114.3 billion, the worst performance since 1988 and economists said the poor start to the new year pointed to an even bigger imbalance in 1997.

Analysts blamed a range of factors from sluggish demand in many of America’s major foreign markets to the continued rise of the dollar. A stronger dollar makes American goods more expensive on overseas markets and imports cheaper for American consumers.

The overall January deficit was the worst showing since the government began keeping monthly figures on both goods and services trade. The $19 billion imbalance in goods alone was the worst performance in history.

This reflected a jump in America’s foreign oil bill, reflecting increased demand and the highest prices for crude oil since the Persian Gulf War in 1991, and an increase in imports of autos and auto parts, reflecting the stronger dollar.