US Current Account Deficit Widens to 7 Year High

The U.S. current account deficit widened to a more than seven-year high in the first quarter as goods exports fell and investment from abroad declined.

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 $124.67 billion, the largest since the fourth quarter of 2008. The fourth-quarter deficit was revised to $113.4 billion from the previously reported $125.3 billion.

Economists polled by Reuters had forecast the current account deficit little changed at $125.0 billion.

The first-quarter current account deficit represented 2.7 percent of gross domestic product, up from 2.5 percent in the final three months of 2015.

The current account deficit has declined from a record high of 6.3 percent of GDP in the fourth quarter of 2005, as rising domestic oil production and lower international oil prices keep the import bill in check.

In the first quarter, the surplus on primary income – which includes dividends – fell $9.6 billion to $37.5 billion. The deficit on secondary income, worker remittances and grants, rose $4.0 billion to $40.3 billion.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza