BUSINESS
03/10/2011 09:25 am ET | Updated May 25, 2011

Trade Deficit Widens On Oil Spike; Jobless Claims Up

(AP) A surge in oil prices helped push imports up at the fastest pace in 18 years in January, giving the country the largest trade deficit in six months.

The Commerce Department says the January deficit increased 15.1 percent to $46.3 billion. Exports rose 2.7 percent to an all-time high of $167.7 billion. But imports rose a faster 5.2 percent to $214.1 billion. That reflected a big jump in America's foreign oil bill, underscoring concerns that surging oil prices could derail the economic recovery.

A widening trade deficit is bad for the U.S. economy. When imports outpace exports, more jobs go to foreign workers than to U.S. workers.

Also, the number of people seeking unemployment benefits rose last week, only the second increase in six weeks.

The Labor Department says applications rose by 26,000 to a seasonally adjusted 397,000 during the week ended March 5. The rise comes after applications fell to their lowest level in nearly three years in the previous week.

The latest report covers the week after the Presidents' Day holiday, when many government offices were closed. Applications usually rise in weeks following holiday-shortened weeks. Most economists expect applications will continue to decline as the economy improves.

Applications below 425,000 signal modest job growth. But they need to fall consistently below 375,000 to signal a decline in the unemployment rate. Unemployment benefit applications peaked during the recession at 651,000.