WASHINGTON--The U.S. current account deficit widened in the first
quarter to its highest level in over three years, as rising oil prices
helped drive up the trade gap.
The broad measure of U.S. international transactions registered a
shortfall of $137.3 billion during the January to through March
period, or 3.6% of gross domestic product, the Commerce Department
said Thursday.
Economists surveyed by Dow Jones Newswires had forecast a deficit of
$134.0 billion last quarter.
The expansion in the current account gap to its highest level since
the final quarter of 2008 followed a widening in the fourth quarter of
last year to $118.7 billion, or 3.1% of GDP. That was revised down
from an initial estimate of a $124.1 billion deficit.
For all of last year, the current account gap--which measures mostly
trade in goods and services but also includes transfer payments and
investment income-widened in GDP terms to 3.1% from 3.0% in 2010.
The first-quarter trade gap increased to $151.0 billion from $146.3
billion in the fourth quarter, as the cost of oil imports spiked
higher.
Oil prices have receded over the past month, pointing to a lower tab
for crude imports going forward, which should help bring down the
trade deficit. Data released last week showed that the trade gap
contracted in April despite higher oil prices.
The unwieldy trade deficit requires the U.S. to attract large amounts
of financing from abroad, or the dollar will lose its value. Treasury
data released last month showed a net foreign capital inflow in March,
including net purchases Treasurys by China and foreign investors in
other countries.
Commerce reported Thursday that net financial inflows to the U.S. were
higher, increasing to $156.7 billion in the first quarter from $63.4
billion in the final quarter of last year. Commerce said the gain was
mostly a result of a decline in U.S.-owned assets abroad.
Foreigners bought a net $34.0 billion of U.S. Treasury securities in
the first quarter, down from net purchases of $82.5 billion in the
previous quarter.
Foreigners were net purchasers of $18.7 billion in U.S. stocks, after
selling a net $17.1 billion in the fourth quarter.
Net sales of U.S. corporate bonds eased to $15.1 billion from $31.3
billion the previous quarter. Foreigners sold a net $400 million of
federal agency bonds, after buying a net $13.1 billion in the fourth
quarter.
Foreign direct investment in the U.S. decreased to $28.7 billion last
quarter from $76.1 billion the previous period, in part due to lower
equity investments.
The surplus on income on U.S.-owned assets abroad also decreased last
quarter, to $47.6 billion from $59.9 billion.
The Commerce report can be found at www.bea.gov/newsreleases/rels.htm.
Write to Tom Barkley at tom.barkley@dowjones.com and Sarah Portlock at
sarah.portlock@dowjones.com
(END) Dow Jones Newswires
June 14, 2012 08:55 ET (12:55 GMT)
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