(Repeats March 6 column with no changes. John Kemp is a Reuters market analyst. The views expressed are his own)
* Chartbook: https://tmsnrt.rs/2UjeY5b
By John Kemp
LONDON, March 6 (Reuters) - The United States ran a trade deficit on goods and services of $621 billion in 2018, up more than 12 percent compared with the previous year, but still below the record $761 billion set back in 2006.
Deteriorating performance on other merchandise is being partly offset by a shrinking deficit on petroleum and a growing surplus in services such as finance, insurance, intellectual property, research and travel.
The country's surplus on services such rose to $270 billion, from $255 billion in 2017, and just $76 billion back in 2006, according to government data published on Wednesday.
But the deficit on goods hit a record $891 billion, up from $807 in 2017, and easily exceeding the previous peak of $828 billion in 2006, according to the U.S. Census Bureau.
The steadily worsening merchandise deficit is a sign domestic demand is outstripping the economy's productive potential, with excess demand leaking abroad through a widening trade gap and a higher exchange rate.
The deteriorating external position is being masked somewhat by the shale revolution and the associated surge in domestic oil and gas production, which has slashed the bill for petroleum imports.
The petroleum deficit was just $53 billion last year, down from a peak of $386 billion in 2008 and $271 billion in 2006 ("U.S. international trade in goods and services", Census Bureau, March 6).
But the deficit on other merchandise surged to a record $825 billion, up from $557 billion in 2006 (https://tmsnrt.rs/2UjeY5b).
The goods gap continued to worsen last year despite the imposition of tariffs on imports from China and on steel and aluminium from a range of countries.
The widening deficit reflects macroeconomic forces, principally the fact the U.S. economy grew much faster than most trading partners over the last 12 months, sucking in imports faster than it could grow exports.
At the same time, the U.S. currency appreciated against the currencies of most other major trading partners, hurting the competitiveness of U.S. exporters and import-competing firms.
As a result, goods and services imports increased by $218 billion (7.5 percent) last year compared with growth in exports of just $148 billion (6.3 percent).
EXTERNAL IMBALANCE
U.S. policymakers have noted the improvement in the country's internal balance, with inflation remaining well contained despite unemployment rates falling to multi-decade lows.