Current-Account Deficit in U.S. Widens to $124.1 Billion
By Timothy R. Homan - Mar 14, 2012 7:48 AM CT
The current-account deficit in the U.S. widened more than forecast in the fourth quarter to $124.1 billion, the biggest in three years.
The gap, the broadest measure of international trade because it includes income payments and government transfers, grew 15 percent from a revised $107.6 billion shortfall in the prior quarter that was smaller than initially estimated, a Commerce Department report showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a $115 billion fourth-quarter deficit.
Enlarge image Import Export
Port of West Sacramento, California. Photographer: Ken James/Bloomberg
Imports (USTBIMP) of goods may keep rising as an improving job market underpins consumer spending, and businesses replace outdated equipment. The overall balance of payments deficit is also a reminder of U.S. dependence on foreign investors for funding.
“A widening of the balance just tells you about the relative growth rate of the U.S. compared with other economies,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “There’s a fairly good chance that the deficit will widen again because imports are on track to outpace exports.”
The gap for all of 2011 widened to $473.4 billion, or 3.1 percent of gross domestic product, from $470.9 billion a year earlier.