US current account trade deficit grew to $137.3 billion in first quarter, largest since 2008 - InfoNews

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US current account trade deficit grew to $137.3 billion in first quarter, largest since 2008

FILE - In this Tuesday, Feb. 28, 2012 photo, trucks transport containers at a port in Tianjin, China. The U.S. current account trade deficit widened in the first three months to the largest imbalance since late 2008, reflecting a big increase in imports in oil, cars and machinery and a drop in U.S. earnings on overseas investments. The Commerce Department says the deficit in the current account, the broadest measure of trade, jumped 15.7 percent to $137.3 billion, up from $118.7 billion in the final three months of last year. (AP Photo/Alexander F. Yuan, File)
June 14, 2012 - 8:54 AM

WASHINGTON - The U.S. current account trade deficit widened in the first three months to the largest imbalance since late 2008, reflecting a big increase in imports in oil, cars and machinery and a drop in U.S. earnings on overseas investments.

The Commerce Department says the deficit in the current account, the broadest measure of trade, jumped 15.7 per cent to $137.3 billion, up from $118.7 billion in the final three months of last year.

The current account is the broadest measure of trade because it tracks the sale of merchandise and services between nations as well as investment flows. Economists watch the current account as sign of how much the United States needs to borrow from foreigners.

U.S. exports of goods increased 1.6 per cent to $388.5 billion, but imports rose a larger 2 per cent to $583 billion with increases in shipments of oil, foreign-made cars and industrial machinery.

America's surplus in services, things such as airline tickets and financial services, increased but the U.S. surplus in investment income declined.

The deficit in 2011 rose to a revised $465.9 billion, up 5.4 per cent from 2010 and the largest imbalance since 2008.

Economists think the deficit will keep rising in 2012. Europe's debt crisis has pushed many countries in that region into recession, meaning they will be buying fewer U.S. exports. In addition, some of America's other major export markets such as China and other emerging economies are seeing their growth slow this year, which will likely cut into U.S. export sales there.

The current account deficit hit an all-time high of $800.6 billion in 2006. It then shrank after a deep recession reduced demand for imports. The gap began widening again after the recession ended in June 2009.

The economy grew at an anemic rate of 1.7 per cent in 2011. Economists had hoped growth would improve this year, but they have been marking down their forecasts recently after a string of disappointing reports have indicated that job growth and consumer spending have slowed.

News from © The Associated Press, 2012
The Associated Press

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