The U.S. trade deficit ballooned to a record US$43.1 billion in January as sales of foreign-made goods posted their second-best month ever.

The trade gap reported by the Commerce Department on Wednesday was 0.9% larger than the $42.7-billion deficit registered in December.

January’s trade deficit swelled as the value of imported goods and services surpassed the value of U.S. exports. Imports of goods and services came to US$132 billion in January, the second-highest level on record. Still, that represented a tiny 0.5% dip from the record level of imports seen in December. The economic rebound in the United States has fed demand for foreign-made goods.

Exports, meanwhile, totalled US$89 billion in January, representing a 1.2% decrease from December.

The decline reflected weaker demand for U.S. food products. Exports of meat and poultry in January plunged by 40% to US$379 million, the lowest level since November 1993, as discovery of mad cow disease in the United States stalled beef exports to many countries.

America’s trade deficit with Mexico of US$3 billion in January was the lowest since December 2002. But the trade gap with Canada widened to US$5.2 billion, from US$4.4 billion in December.

The U.S trade deficit with China expanded to US$11.5 billion in January, up from US$9.9 billion in December.

The U.S. trade deficit with Japan, meanwhile, narrowed to US$5.3 billion in January, compared with US$5.7 billion the month before. U.S. exports to the country, valued at US$4 billion, marked the lowest level in a year.

“The 1.2% drop in exports on top of the 0.6% export fall in December is disturbing,” comments BMO Nesbitt Burns. “The figures get U.S. GDP off to a sluggish start in the current quarter and will fuel market chatter that the economy will slow as tax refunds stop in the next few weeks.”

Nesbitt adds that trade data are lagging indicators and rarely market-moving. “However, this batch of figures ran counter to the prevailing strong growth story and may erode the impression that economic fundamentals are stout. The massive decline in the U.S. dollar “should” have had more positive results on U.S. trade by now,” it warns.