The U.S. trade deficit ballooned to record high levels in September after exports — notably of aircraft — fell and imports surged, the Commerce Department reported today.

In other economic news, a widely watched gauge of consumer confidence strengthened this month and the government reported a slightly larger than expected rise in new unemployment claims.

The trade gap, the difference between U.S. exports and imports of goods and services, rose more than 11% in September from the previous month's revised results to $66.1 billion, according to the Commerce Department.

While U.S. exports of services hit a record high, overall exports fell 2.6% to $105.2 billion. Meanwhile, imports rose 2.4% during the same period to $171.3 billion, which was also a new high mark.

Economists said the U.S. exports would have been stronger if it were not for some unique factors. A machinist strike at aerospace giant Boeing was largely responsible for an approximately $2.4 billion plunge in exports of capital goods, such as aircraft. Agricultural exports were disrupted because of the closure of the Port of New Orleans in the aftermath of Hurricane Katrina.

"Excluding these items, the deficit would still have been wider than in August, but by considerably less than actually reported," said economist Joshua Shapiro in a research note for MFR Inc., a business consulting firm.

The nation's politically sensitive trade gap with China rose to $20.1 billion.

In other economic news, the University of Michigan's index of consumer sentiment rose by a larger than expected 5.7 points early this month to 79.9%, according to people with access to the proprietary report. The index rebounded from a string of declines as the impact of hurricanes Katrina and Rita and soaring gasoline and fuel prices have weighed down consumers.

A recent drop in gasoline prices and warmer than normal temperatures that have lessened the need to use heating fuels have left consumers feeling "somewhat better," said economist Steven Wood in a report. "However, they have yet to recover to their level of optimism of the summer. Nevertheless, it is unclear that the recent plunge in consumer sentiment has had any noticeable effect on real consumer spending."

In a separate report, the Labor Department said that first time claims for unemployment insurance for the week ending Nov. 5 rose by 2,000 from the previous week to a seasonally adjusted 326,000 claims. The four-week moving average, a more stable figure, fell by 16,250 claims to 334,250.

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