US Deficit Falls
December 15, 2011 by staff
US Deficit Falls, The U.S. deficit in the broadest measure of foreign trade fell in the summer to the lowest level in nearly two years, reflecting stronger exports of commercial aircraft and other goods and a jump in the sales of services such as airline tickets to foreigners.
The Commerce Department said Thursday that the deficit in the current account dropped 11.6 percent to $110.3 billion, the lowest level since the final three months of 2009.
The current account is the broadest measure of American’s financial dealings with the world. It covers not only trade in goods but also services, such as air travel, and investment flows among nations. Economists watch the current account as a sign of how much the United States needs to borrow from foreigners.
For the third quarter, the deficit in goods dropped 4.6 percent to $181.8 billion, reflecting a strong 2.6 percent rise in U.S. exports and a much smaller 0.2 percent increase in imports.
The U.S. surplus in services increased 4.1 percent to $46.2 billion with strength led by gains in airline ticket sales to foreigners. The surplus in income rose 2.5 percent to $58.3 billion in the third quarter. There was also a smaller deficit of $33 billion in unilateral transfers, the category that covers U.S. foreign aid.
Economists at JPMorgan Chase are forecasting that the account deficit will increase this year to $480.2 billion. That would be a modest 2 percent increase from last year’s deficit.
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