The U.S. trade deficit swelled to a record $46 billion in March, propelled by rising prices for imported oil and consumers' unending hunger for vast quantities of goods from abroad.

The previous monthly high for the trade deficit, in January, was $43.5 billion.

The widening of the trade gap, reported yesterday by the Commerce Department, was the latest in a series of setbacks that have cast a shadow on the generally bright U.S. economic outlook. Interest rates have moved up in recent weeks with concern that inflationary pressures may prompt the Federal Reserve to tighten credit, and on Tuesday crude oil prices closed above $40 a barrel on the New York Mercantile Exchange for the first time since 1990. Those factors, combined with the stream of bad news out of Iraq, sent U.S. stock indexes tumbling in recent days to their lowest levels this year. Share prices sank anew yesterday morning, but recovered late in the day to end mixed.

The trade statistics were more evidence that U.S. consumers remain in a buying mood as the economic expansion gathers steam, but the figures also showed that much of that demand is for imported cars, electronic gadgets and other foreign products. That surprised analysts because it came despite a decline in the dollar's value against other currencies over the past couple of years. A lower dollar makes imported goods more expensive relative to products made in the United States.

Although the falling dollar helped boost exports 2.6 percent in March to a record $94.7 billion, imports rose 4.6 percent, to $140.7 billion. Part of the reason was higher oil prices, which helped lift the value of petroleum imports to $13.8 billion from $12.2 billion the previous month.

The persistently yawning trade deficit troubles many economists, because when the United States buys so many more goods from overseas than it sells, it must effectively borrow the difference from foreigners. The dollars that Americans spend on imports are typically invested by foreigners in U.S. securities such as Treasury bonds, and the danger of continuing that process is that foreigners might unload their holdings on a huge scale, inflicting significant damage on the U.S. economy.

"This shows we're consuming beyond our means in some sense," said William C. Dudley, chief economist at Goldman Sachs & Co. "We're depending on the kindness of strangers, to give us goods and services in exchange for pieces of paper."

As long as foreigners remain willing to buy those pieces of paper the situation can continue, Dudley said, but "the big message" of yesterday's report is that for the trade deficit to narrow and U.S. dependence on foreign capital to diminish, "the dollar needs to fall further." And a decline in the dollar, he said, "will essentially mean a reduction in the U.S. standard of living" as foreign goods become more expensive.

The dollar declined a little more than 7 percent in the year before the period covered by yesterday's report, measured on a weighted basis against the currencies of major trading partners. The U.S. currency has risen in recent weeks, but after yesterday's report it dropped against the euro, weakening to $1.1918 per euro from $1.1864 the day before, and against the Japanese yen, the greenback dipped to 113.19 yen from 113.25.

The politically sensitive trade deficit with China reflected the broader trend in the trade figures. U.S. exports to China rose in March to a record $3.4 billion, but imports also increased, and the trade gap for the month widened to $10.4 billion from $8.3 billion in February.

Bush administration officials have long contended that the overall trade deficit does not pose a serious risk because foreigners will continue to pour money into the United States as long as this country remains a hospitable and profitable destination for overseas capital. Democratic presidential candidate John F. Kerry said yesterday's report raised more concerns about U.S. dependence on foreign borrowing.

The good news in yesterday's report was the surge in exports, which reflected both the lower dollar and rising economic strength abroad. Both factors helped increase demand for U.S. goods in March, lifting exports 14.6 percent above where they were a year earlier.

"March exports of industrial supplies, automotive products and consumer goods were all at record highs," said David Huether, chief economist of the National Association of Manufacturers. "This is very good news indeed for manufacturers . . . Weak exports have held manufacturing back for the past 43 months, and now strengthening exports are bringing us a long-overdue boost."

But the import side of the trade balance was strong too, and the higher cost of oil imports explained only some of the $6.2 billion increase in overall imports. The biggest factor was an increase of $2.5 billion in imports of non-auto consumer goods, said Peter Kretzmer, senior economist at Bank of America Corp.

Part of the problem, some economists said, may be a statistical quirk in the trade figures stemming from the fact that many months may pass before the declining dollar causes people to switch from imports to domestic goods. In the meantime, higher prices for imports increase the nation's overall import bill. That problem may abate as more time passes and buying patterns change.

For that reason and others, some economists said they expect the trade gap to shrink in coming months. Others disagreed, citing the fact that oil prices have risen since March.

"It's going to get worse before it gets better," Dudley said. "We probably haven't seen the peak yet."