The U.S. trade deficit hit a record-high of $61.04 billion in February according to the latest Commerce Department report.

Driven principally by imports of middle eastern oil and Chinese textiles, the deficit defied expert projections and climbed well past its January mark of $58.5 billion.

The increase puts the annual deficit rate for 2005 at $717.2 billion. The 2004 annual deficit was $617.1 billion.

The U.S. actually imported slightly less oil in February compared to January (10.4 million barrels a day versus 10.6 million barrels a day) but paid more as the price of oil jumped from $35.35 in January to $36.85 in February.

Imports of Chinese textiles rose nearly 10 percent in February from January. U.S. textile leaders are urging the Bush Administration to implement quotas to retard the flow of China’s goods into the country.

The total of all imported goods and services reached an all-time high of $161.5 billion.

Experts disagree about the cause of the rising U.S. deficit. The Bush Administration maintains that the U.S. economy is simply growing at a faster rate than other countries and its growth is reflected in the consumer demand for goods; albeit imported.

Critics of the Bush Administration say the deficit is proof of the failure of the administration's free trade policies.