Trade deficit swells in August

WASHINGTON (AP) -- The U.S. trade deficit swelled to a record $38.5 billion in August, reflecting Americans' hearty appetite for foreign-made clothes, cars and TVs.

The Commerce Department reported Friday that the trade deficit was a sizable 9.7 percent higher than the $35.1 billion trade gap reported for July.

After posting a small improvement in July, the trade deficit mushroomed in August as imports posted a solid increase, but exports fell.

Imports of goods and services rose by 2 percent in August from the previous month to $120.3 billion, the highest level in 17 months.