The trade gap reported by the Commerce Department on Wednesday was 0.9 percent larger than the $42.7 billion deficit registered in December.
January's trade deficit swelled as the value of imported goods and services eclipsed the value of U.S. exports.
Imports of goods and services came to $132 billion in January, the second-highest level on record. Still, that represented a tiny 0.5 percent 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, totaled $89 billion in January, representing a 1.2 percent decrease from December. That largely reflected weaker demand for U.S. food products. Exports of meat and poultry in January plunged by 40 percent to $379 million, the lowest level since November 1993, as the first case of mad cow disease in the United States stalled beef exports to many countries.
The latest snapshot of trade activity comes as tensions have grown over global trade and the migration of jobs in the United States to other countries.
President Bush on Tuesday promoted trade as crucial to economic growth and renewed a warning against "economic isolationists" who question free-trade deals. The charge of economic isolationism was aimed at presumptive Democratic presidential nominee John Kerry.
The Massachusetts senator supported the North American Free Trade Agreement and world trade deals. On the campaign, he has said he would place all trade deals under a 120-day review and wants labor and environmental standards in new agreements. He also would require companies to provide notice before moving jobs to other countries.
Federal Reserve Chairman Alan Greenspan last week said that a weaker U.S. dollar should eventually help narrow the country's swollen trade deficits.
He also repeated a warning that "creeping protectionism" could hurt the flexibility of the global economy — something that has played a key role in helping the United States and other countries weather economic hard times. As countries fortunes have sagged, their goods got cheaper and they were able to export more. That mechanism would not operate if trade barriers were in place.
America's politically sensitive trade deficit with China expanded to $11.5 billion in January, up from $9.9 billion in December.
U.S. manufacturers contend that China is deliberately undervaluing it currency, the yuan, by as much as 40 percent, giving that country a big trade advantage when competing with U.S. companies and contributing to the loss of U.S. jobs.
The Bush administration has been pressing Beijing to stop linking its currency to the dollar and let the value of the yuan be set in open markets.
The U.S. trade deficit with Japan, meanwhile, narrowed to $5.3 billion in January, compared with $5.7 billion the month before. U.S. exports to the country, valued at $4 billion, marked the lowest level in a year.
America's trade deficit with Mexico of $3 billion in January was the lowest since December 2002. The United States' trade gap with Canada widened in January to $5.2 billion, up from $4.4 billion in December.
The United States' trade deficit with oil-producing nations, including Saudi Arabia and Venezuela, grew to $4.7 billion in January, the highest level since April 2003. The average price per barrel of imported crude oil in January, meanwhile, climbed to $28.55, the highest since March 2003.
The trade deficit is important because it means the rest of world holds IOUs from the United States, usually in the form of government securities.
In other words, instead of Americans saving in U.S. markets, foreigners are, and interest payments and principle on government debt are flowing outside the country.
Since the market for government bonds affects the interest rate, foreign countries could trigger a market crisis in the United States if they suddenly try to unload their U.S. securities. A sudden sell-off of Treasury bills would pressure interest rates to rise dramatically, slowing economic growth.