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19 September 2017
 |
| Current account (The Total Investment & Insurance Solutions) |
The deficit in the broadest measure of U.S. trade rose to the highest
level in more than eight years this spring, reflecting in part a drop in fines
and penalties paid by foreign companies.
The Total Investment & Insurance Solutions
The deficit in the current account increased
to $123.1 billion, up 8.5 percent from an imbalance of $113.5 billion in the
first quarter, the Commerce Department reported Tuesday. It was the biggest
deficit since a gap of $150 billion in the fourth quarter of 2008. The Total Investment & Insurance
Solutions
The current account is the most complete
measure of trade because it includes not only goods and services but investment
flows and other payments between the United States and the world. The Total Investment & Insurance
Solutions
President Donald Trump has promised to reduce
America's trade deficit, contending it costs U.S. factory jobs.
One of the biggest contributing factors to
the larger deficit in the April-June quarter was a decline in receipts from
foreigners after they had risen sharply in the first quarter. The government
attributed the $5.2 billion decrease in receipts of secondary income from
foreigners to a decline in fines and penalties paid by foreign companies. That
category had risen sharply in the first quarter.
Exports of goods and services increased $2.2
billion in the second quarter. Exports are getting a lift from a pickup in
global growth and a drop in the value of the U.S. dollar against other
currencies. A weaker dollar makes American products more competitive on foreign
markets.
Imports of goods and services were also up in
the second quarter, rising $11.8 billion, reflecting rising domestic demand
from stronger U.S. growth.
The rise in the current account deficit put
the imbalance in the second quarter at a level equivalent to 2.6 percent of the
total economy, as measured by the gross domestic product, up from 2.4 percent
in the first quarter. By comparison, the largest current account deficit in
relation to GDP was in the fourth quarter of 2005 when the deficit totaled 6.3
percent of GDP.
Trump says America's trade deficits have been
caused by bad trade deals and abusive practices by China and other U.S. trading
partners. He has pledged changes that he says will reduce the deficit and bring
back American factory jobs.The Total
Investment & Insurance Solutions
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