Updated from 11:14 a.m. EST

Americans' insatiable appetite for foreign goods continued to grow in January, widening the already huge disparity between the value of goods imported compared to the value of goods exported, the

Commerce Department

said Tuesday.

The

trade deficit

, a measure of the broad international trade behavior of the U.S., showed that the U.S. imported a record $28 billion more worth of goods than it exported.

That followed a similar report last week that the

current account deficit

, a measure of international flows of money comprised mostly of trade, ballooned to $99.78 billion in the fourth quarter of 1999.

The January number was wider than economists had been expecting. A consensus of economists polled by

Reuters

had forecast a trade deficit of $26.5 billion.

The widening trade deficit, coupled with rising wholesale costs, high oil prices, soaring asset prices and historically low U.S. unemployment, are among reasons that

Federal Reserve

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policymakers

raised interest rates by a quarter-point Tuesday.

The rate increase was the fifth such move by the Fed since last June. The Fed has been steadily raising its benchmark federal funds rate -- the rate which healthy banks charge one another for overnight money, acting as a basis for other interest rates -- by 1.25 percentage points in an attempt to cut demand by making it harder for consumers and businesses to borrow and spend.

The trade deficit has widely been seen by the Fed as the most troubling component of the record 108-month U.S. economic expansion. Officials at the central bank have repeatedly voiced worries about the size of the deficit, and the imbalance it represents between the supply side and demand side of the U.S. economy.

In its statement accompanying Tuesday's rate hike decision, the Fed policymaking committee said it "remains concerned that increases in demand will continue to exceed the growth in potential supply, which could foster inflationary imbalances that would undermine the economy's record expansion."

The U.S.' heavy reliance on foreign goods is seen as damaging for the economy at large because it in turn makes the nation dependent on the inflows of foreign capital through investments. As U.S. markets continue to chalk up heavy returns, foreigners have been eager investors in U.S. stocks and bonds, but any temperance of foreign enthusiasm could spell trouble in the form of a weaker dollar and inflation.

"The rest of the world seems happy to hold unlimited quantities of dollars, a commodity we can produce at zero marginal cost, so this is perfectly sustainable in the short term," said Bill Cheney, chief economist at

John Hancock Financial Services

.

"Longer term, of course, the gap poses genuine risks," he said. "Some day, foreign investors will want a return on all the dollars they hold."

The January trade gap was mostly driven by a sharp gain in imports, while exports declined for the first time in nearly 10 months.

Imports ran at $112.07 billion in January, up from $110.17 billion in December, because of the rising value of imported goods including crude oil, automobiles and auto parts.

Crude oil imports in particular rose to $5.85 billion from $5.68 billion in December. That value might decline in coming months, even if oil imports continue to rise, if oil prices continue to ease from their early-March highs above $30 per barrel. The

Organization of Petroleum Exporting Countries

will meet to consider increasing oil production later this month, which could help lower crude prices.

Exports sagged to $84.06 billion in January, compared with $85.56 billion in December, mostly in such areas as semiconductors, industrial supplies, and consumer goods.