U.S. account deficit narrowed down in the second quarter
Washington, DC, United States (4E) – The U.S. current account deficit, the amount owed by the country to the rest of the world, declined by 12 per cent in the second quarter as imports slowed down and earnings from U.S. investments abroad increased.
Based on the U.S. Department of Commerce data released on Tuesday, the account deficit fell to $ 117.4bn in the three months through June, lower than the $133.6bn recorded in the revised first quarter figure.
The current account measures the value of goods and services sold by a nation compared to how much it buys from abroad including the inflows and outflows of large money.
The agency explained that the current account deficit in the quarter was primarily driven by falling commodity deficit as oil prices continue to drop as well as increasing investment income overseas by U.S. firms.
With declining value in imports, the deficit in goods fell from $194.3bn in the first quarter to $185.8bn in the second quarter.
The services sector had a surplus of $46.5bn, higher than the $45.9bn posted in the previous three-month period.
The current account deficit in the second quarter accounts for 3 per cent of the nation’s gross domestic product, lower than the 3.5 per cent rate in the first quarter. That ratio to GDP is significantly lower compared to its peak in the fourth quarter of 2005 when it reached 6.5 per cent, although higher than the lowest level of 2.4 per cent in the second quarter of 2009.