The U.S. current account deficit widened in the first quarter to its highest level since 2012 likely due to the strong dollar’s drag on overseas profits and exports.
The Commerce Department said on Thursday the current account deficit, which measures the flow of goods, services and investments into and out of the country, increased 9.9 percent to $113.3 billion. That was the largest shortfall since the second quarter of 2012.
Economists polled by Reuters had forecast the deficit rising to $117.0 billion. The government revised data going back to the first quarter of 1999.
The first-quarter current account deficit represented 2.6 percent of gross domestic product, the highest since the third quarter of 2012, from 2.3 percent in the fourth quarter.
Still, the deficit remained well below a record high of 6.3 percent touched in the fourth quarter of 2005 as strong domestic energy production keeps the import bill in check.
The robust dollar has hurt the profits of multinational corporations and is also constraining export growth. The dollar gained about 4.5 percent against the currencies of the United States’ main trading partners in the first quarter.