Monday, September 1st18.9°C
22817
22746

US current account deficit jumps from 14-year low as exports, overseas earnings fall

WASHINGTON - A drop in U.S. exports and lower income from overseas investments drove the U.S. current account deficit to its highest level in 18 months.

The Commerce Department says the deficit jumped to a seasonally adjusted $111.2 billion in the January-March quarter, up from a revised total of $87.3 billion in the October-December quarter. The fourth quarter's total was the smallest in 14 years.

The current account is the country's broadest measure of trade, covering not only goods and services but also investment flows. A wider deficit can act as a drag on growth because it means U.S. companies are earning less from their overseas markets.

Rising petroleum exports have narrowed the gap in recent years, though such exports fell in the first quarter, widening the deficit.

Overall exports dropped to $399.7 billion from $407.1 billion in the previous quarter, according to the report released Wednesday. Exports of food and feeds also fell, mostly because of a drop in soybean exports. Harsh winter weather harmed many U.S. harvests.

A larger trade gap in the first three months of this year cut nearly a full percentage point from growth. Economists now estimate the economy contracted at an annual pace of 2 per cent in the first quarter. But they expect growth will resume in the current quarter at roughly a 3.5 per cent rate.

Americans received $196.5 billion in income from overseas investments, down from $198.8 billion in the previous quarter.

The current account gap is still relatively low by historical standards. It regularly topped $150 billion in the four years before the recession.

Two principal trends have narrowed the deficit in the past four years. First, the U.S. has benefited from an oil and gas boom, mostly because new drilling technologies have made it feasible to drill for oil and gas in states such as North Dakota, New York and Pennsylvania.

That's pushed down the trade deficit by boosting petroleum exports and lowering oil imports. Petroleum exports reached a record high last year, while imports dropped nearly 11 per cent.

Secondly, low U.S. interest rates have reduced the payments foreigners have received on their holdings of U.S. Treasury bonds and other investments. Meanwhile, the payments that Americans receive on overseas investments have risen, boosting the nation's investment surplus.

The Canadian Press


Read more Business News

21807


Recent Trending




Today's Market
S&P TSX15625.73+67.561
S&P CDNX1023.991.62
DJIA17098.4518.88
Nasdaq4580.271+22.577
S&P 5002003.37+6.63
CDN Dollar0.9173-0.0021
Gold1281.70-2.1001
Oil95.96+1.29
Lumber349.60+2.60
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.08+0.01
Anavex Life Sciences0.25+0.01
Metalex Ventures0.0750.00
Russel Metals36.48+0.09
Copper Mountain Mining2.93+0.02
Colorado Resources0.180.00
ReliaBrand Inc0.10+0.001
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



20759

FEATURED Property
20583821047 Cascade Placce
5 bedrooms 3 baths
$675,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...

_








Member of BC Press Council


22810