WASHINGTON (AP) -- America's trade deficit shot up in July to the highest level in 16 months as oil imports hit an all-time high, offsetting strong export growth. The deficit with China climbed to the second highest level on record.

The Commerce Department reported Thursday that the deficit rose by 5.7 percent to $62.2 billion in July, much worse than the $58 billion deficit that Wall Street expected. It pushed the gap between what America imports and what it sells abroad to the highest level since March 2007.

The trade deterioration reflected record crude oil prices in July that helped push America's foreign oil bill to an all-time high of $51.4 billion, up 13.7 percent from June.

The big rise in oil prices, with the average barrel of imported crude jumping to a record $124.66, boosted overall imports by 3.9 percent to a record $230.3 billion.

That increase offset another strong showing for U.S. exports which rose by 3.3 percent to a record $168.1 billion. There were big gains in overseas sales of commercial aircraft, computers and U.S.-made cars. Exports have been the major bright spot for the U.S. economy while the country has been battered by a prolonged slump in housing, rising unemployment and a severe credit crunch.

The Bush administration points to the export gains as justification for its support of free trade. Democrats contend the administration's pursuit of free-trade agreements left U.S. workers exposed to unfair

NEW YORK (AP) -- Its future in jeopardy and options dwindling, Lehman Brothers scoured Wall Street Thursday for a financial lifeline. Top executives contacted banks and rival investment houses about a possible deal to buy the company, bankers and industry executives close to the situation said.

The nation's fourth-largest investment bank, which had tenaciously resisted putting itself up for sale, finally relented after a free-fall in its stock price and growing doubts about whether other financial institutions would continue to do business with it, according to these officials. They asked not to be named because they are not authorized to comment publicly.

Government officials who asked for anonymity because of the sensitivity of the ongoing discussions said that a number of options were being explored and that no decisions had been reached on how any deal involving Lehman would be structured.

The Federal Reserve and the Treasury Department have been working to help resolve Lehman's situation. Fed officials are having conversations with relevant parties and getting updates. It's premature to say what form any final resolution would take.

Any resolution of the Lehman troubles is not expected to involve the use of government money which would set it apart from the billions of dollars that the government put at risk to facilitate the sale of Bear

WASHINGTON (AP) -- The U.S. trade gap has hit a 16-month high, the job market is shrinking and exports -- a rare item in the economy's plus column lately -- may slow.

They are signs that the economy may be deteriorating further, analysts and business leaders said Thursday, which could intensify the political debate on how to fix the problems less than 60 days before Americans choose a new president.

The U.S. trade deficit soared in July, the Commerce Department said, as oil imports hit an all-time high. While exports increased, economists expect slowing economies in Europe and Asia will reduce export growth later this year.

The Labor Department also reported that new applications for unemployment benefits fell less than expected last week as the struggling economy continues to take a toll on workers.

And in a sign the job market could get worse, nearly one-third of the country's top executives expect to cut payrolls in the coming months, according to a survey released Thursday by the Business Roundtable, an association of large company CEOs.

Economists welcomed the continued strength in exports, which have been the primary driver of the U.S. economy in a year when the country has been battered by a prolonged slump in housing, rising unemployment and a severe credit crunch.

"There is no question that exports are driving our economy," said Commerce Secretary Carlos Gutierrez in

MOUNT LAUREL, N.J. (AP) -- The Campbell Soup Co. said Thursday its profit rose 46 percent from a year ago, as it raised prices on many of its products and got a lift from an extra week in the latest reporting period.

Company President Douglas Conant told analysts on a conference call that the company was able to turn in that performance despite unusual inflation for ingredients.

"In my 33 year career, I cannot recall a more challenging environment in the food industry," he said.

Conant said he expected costs to continue to rise for the company -- but for price increases and productivity improvements to be enough to offset it in fiscal 2009.

He reiterated the company's expectations that the company's earnings will be up 5 to 7 percent in the new fiscal year. The forecast is in line with the consensus of analysts who follow the company.

The Camden, N.J.-based food company earned $89 million, or 24 cents per share, in the three months ended Aug. 3. That's up from a profit of $61 million, or 16 cents a share, a year ago.

Including a charge for restructuring, the earnings were $96 million, or 26 cents per share, up 81 percent from the adjusted year-ago profit of $53 million, or 14 cents per share.

The latest figures are a penny per share better than the consensus estimate from 14 analysts surveyed