The U.S. merchandise trade deficit swelled by 21 percent to $10.5 billion in February as Americans increased their appetite for foreign goods, the government said Friday.

The Commerce Department said the sharp deterioration in the trade picture reflected a 5.3 percent increase in imports, which swamped a slight 0.6 percent rise in export sales. The report was in line with economists' expectations.The February deficit, combined with a revised shortfall of $8.68 billion for January, would translate into an annual imbalance of $115 billion compared with a deficit for all of 1988 of $119.76 billion.

Last year's figure represented a 21.3 percent improvement over 1987's record high of $152.1 billion, but analysts generally expect the positive trend to fizzle this year.

Rising prices for imported oil and a strengthening of the value of the dollar, which makes U.S. goods more expensive overseas, are contributing to the stall.



Trade deficit by country

The U.S. merchandise trade deficit, in millions of dollars, from December through February with selected countries and groups:

Country February January December

Canada 824.3 1,805.3 985.2

W. Europe 624.4 +46.5 1,205.2

Japan 4,650.0 3,533.4 5,072.3

Mexico 89.4 134.4 +8.0

Hong Kong 201.5 431.4 378.0

Taiwan 988.8 1,125.8 1,164.8

South Korea 489.6 680.5 762.6

OPEC nations 843.6 1,069.4 620.2