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Imported cars boost U.S. trade deficit

WASHINGTON - The U.S. trade deficit unexpectedly rose in February for a second straight month as a big increase in imports of foreign cars offset the first decline in oil imports in a year.

The Commerce Department reported yesterday that the trade deficit rose 5.7 percent in February to $62.3 billion, the highest since November. Analysts had forecast that the deficit would decline, believing that a severe economic slowdown in the United States would cut demand for imports.

However, imports of goods and services shot up 3.1 percent to a record $213.7 billion, reflecting a big surge in car imports.

Exports also set a record, rising 2 percent to $151.4 billion because of strong gains in the sale abroad of U.S. heavy machinery, computers and farm goods.

The rise in the trade deficit gave ammunition to critics who say the Bush administration's policies have helped lose more than three million manufacturing jobs since January 2001, as the deficit set records for five consecutive years.

"Wages are falling and the middle class is shrinking because of trade deficits," James Hoffa, president of the International Brotherhood of Teamsters, said yesterday at the end of a three-day "Working Class Convoy for Change" in Pennsylvania.

For the first two months of this year, the trade deficit is running at an annual rate of $727.6 billion, up from $708.5 billion last year, which had seen the first decline in the deficit after five consecutive annual records.

Analysts, who believe the United States has fallen into a recession, expect the deficit will decline again this year as slumping demand in this country cuts into imports while a weak dollar boosts sales of U.S. products overseas.

For February, the sensitive deficit with China dropped 9.6 percent to $18.4 billion, the lowest in a year. The improvement reflected big declines in imports of computers, cell phones and other telecommunications equipment, and clothing.

 
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