by Calculated Risk on 12/12/2007 11:19:00 AM

The Census Bureau reported today for October 2007:

"a goods and services deficit of $57.8 billion, $0.7 billion more than the $57.1 billion in September"

Click on graph for larger image.

The red line is the trade deficit excluding petroleum products. (Blue is the total deficit, and black is the petroleum deficit).

The ex-petroleum deficit is falling fairly rapidly, almost entirely because of weak imports (export growth is still strong). The ex-petroleum deficit is now almost all China! From Greg Robb at MarketWatch: Trade gap widens in October on high oil prices

The U.S. trade deficit with China widened to a record $25.9 billion in October from $24.4 billion in the same month last year and $23.8 billion in September. The trade gap with China rose to $213.5 billion in the first 10 months of the year, up from $190.7 billion in the same period last year.

Unlike the previous decline in the trade deficit (during the '01 recession), the value of petroleum imports - in dollar terms - are still strong. In barrels, imports appear to be flat or declining slightly year over year.

Note also that not only oil import prices are surging. From Rex Nutting at MarketWatch: Import prices rise 2.7%, the most in 17 years

Driven by a weaker dollar and much higher prices for petroleum and natural gas, import prices surged 2.7% in November, the largest monthly increase in 17 years, the Labor Department reported Wednesday.

Even excluding fuels, import prices rose 0.5%.

Import prices have now risen 11.4% in the past year, the largest gain in the 25-year history of the import price index.