The U.S. trade deficit set to another record in January as exports climbed, but demand for foreign goods remained strong. The U.S. Commerce Department said today that the U.S. deficit in international trade of goods and services widened 5.3% to US$68.51 billion from a revised US$65.07 billion in December.

Imports rose 3.5% to a record US$182.88 billion, while exports advanced 2.5% to a record US$114.37 billion. The U.S. trade deficit was US$723.6 billion for all of 2005.

Higher oil prices helped widen the gap. The value of crude imports rose to US$15.72 billion in January from US$15.50 billion in December. Imports for all energy-related petroleum products rose to US$22.58 billion from December’s US$21.37 billion.

Exports increased by US$924 million for capital goods, including civilian aircraft, and overseas sales of industrial materials like gold, oil and cotton were up US$1.04 billion. Exports of foods and beverages advanced by US$545 million while foreign sales of autos and parts rose just US$70 million.

The U.S. trade deficit with China increased to US$17.91 billion from US$16.30 billion in December. Deficits with other major trading partners were mixed. The shortfall with Japan narrowed to US$6.45 billion from US$6.8 billion, while the trade gap with the euro area rose slightly to US$7.53 billion from US$7.52 billion. The gap with Mexico swelled to US$4.64 billion from US$4.26 billion. The deficit with Canada increased to US$8.93 billion from US$8.04 billion.

Separately, initial jobless claims rose by 8,000 to a seasonally adjusted 303,000 in the week ending March 4, the U.S. Labor Department said Thursday. The four-week moving average of initial jobless claims increased last week by 6,250 to 293,500.