The U.S. trade deficit surged 10.4 percent to 63.9 billion U.S. dollars in March, the highest level since September last year, the Commerce Department reported Thursday.

The March surge in the trade deficit was led by a 17.6 percent jump in oil imports, which totaled 24.6 billion dollars, the highest level in six months.

Analysts had been expecting a trade deficit of 60 billion dollars for March.

Exports of U.S. goods and services increased by 1.8 percent to 126.2 billion dollars in March, the second highest level on record.

The nation's imports of goods and services rose by 4.5 percent in March to 190.1 billion dollars, also the second highest level on record.

By countries and areas, the U.S. trade deficit with China dropped 6.4 percent to 17.2 billion dollars, the smallest gap in 10 months. U.S. exports to China set a record, while imports of Chinese products declined slightly.

The U.S. trade deficit with Canada was up by 21.7 percent to 5.7 billion dollars in March. Its deficit with the European Union increased by 21.3 percent to 7.7 billion dollars.

For the three months ending in March, the trade deficit is running at an annual rate of 722.6 billion dollars, compared to the all-time record of 765.3 billion dollars set last year.

The trade imbalance has set new records for five consecutive years.