NEW YORK (CNNMoney.com) -- Rising oil prices increased the U.S. trade gap in July to a record high, the government reported Tuesday, as the deficit between imports and exports soared above forecasts.

The Commerce Department reported that the trade gap reached $68 billion in July, up from $64.8 billion reported in June. Economists surveyed by Briefing.com had forecast the gap to rise to $65.5 billion.

The previous record was $66.6 billion in October, when high oil prices and a jump in gasoline imports in the wake of hurricanes Katrina and Rita swelled the gap.

The average price of a barrel of imported oil hit $64.84 in July, also a record high. That was up 4.5 percent from the June levels.

The trade gap is important to the economy because it reduces U.S. economic activity, helping to shift work and jobs to overseas producers of goods and services. The gross domestic product, the broad measure of the nation's economic activity, is adjusted lower to account for the trade deficit.

Economists said that while the trade gap may retreat slightly in future months with the recent decline in oil prices and the expected slowdown in the U.S. economy in the second half of the year, the gap will likely stay at historically high levels for the foreseeable future.

Imports now exceed exports by such a large ratio, that exports have to grow 57 percent faster than imports, simply to keep the trade deficit unchanged.

"The August trade deficit could be ugly as well, so you can't rule out in the near term it could set another record," said Jay Bryson, international economist for Wachovia. "As you move into the fourth quarter, and into early next year, it should retreat some. But it's going to stay high, unless we have a serious recession, or a serious collapse in the dollar."

The 12 largest monthly trade deficits on record have all come in the last 12 months, and the trade gap for the first seven months of 2006 is running nearly 14 percent ahead of the same period of 2005, a year that saw the fourth straight record high annual trade gap.

In fact, July's one-month record would have been a record annual trade deficit as recently as 1992.

While lower oil prices should take some of the pressure off the trade gap, it wasn't just oil that helped drive the trade gap up to record levels.

The report showed the gap attributed to petroleum products rose 4.3 percent in the month, while the gap attributed to non-petroleum products rose slightly faster, up 5 percent.

That was partly due to a $1.3 billion, or 1.1 percent decrease in exports, after exports rose to record highs each of the last four months. If foreign buyers are slowing their purchases of U.S. goods and services, it's another warning sign that the economy will be cooling off in the months ahead.

Among the items that saw big decreases in exports were commercial aircraft, a volatile sector that was down $603 million. U.S. aircraft maker Boeing (Charts) is the nation's largest exporter, but its sales are very uneven month to month.

Other sectors that saw big drops in exports were computers and computer accessories, which was down $442 million, and industrial supplies and materials, down $593 million.

Meanwhile, the appetite of U.S. consumers and businesses for imported goods stayed strong. Imported computers and accessories rose by $425 million, while imported televisions, VCRs and other video products rose by $234 million.

China remained the country with the largest trade gap with the United States, although that gap was trimmed ever so slightly to $19.6 billion from $19.7 billion the month before. Part of that may be due to a 2 percent drop in apparel imports by the United States in the month.

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