America's trade deficit bolts up 16% to $137.3 billion

Published Jun 14, 2012 at 10:00 am (Updated Jun 14, 2012)

The U.S. current account trade deficit grew this winter to its widest imbalance in three years. A big increase in imports of oil, cars and machinery and a drop in U.S. earnings on overseas investments drove the deficit's increase. The deficit in the current account jumped 15.7% to $137.3 billion in the January-March quarter. That's up from $118.7 billion in the final three months of 2011, the Commerce Department reports today. The current account is the broadest measure of trade. It tracks the sale of merchandise and services between nations as well as investment flows. U.S. exports of goods increased 1.6% to $388.5 billion. But imports rose a larger 2% to $583 billion. America's surplus in services—things such as airline tickets and financial services—increased slightly to $43.5 billion. But the U.S. surplus in investment income declined by $12.3 billion to $47.6 billion. This change reflects lower payments to Americans on their overseas investments and higher payments to foreigners on their U.S. investments. Economists watch the current account as a sign of how much the United States needs to borrow from foreigners. The deficit in the first quarter totaled 3.6% of the overall U.S. economy, up from 3.1% in the fourth quarter. However, it was still well below the all-time high from late 2005, when the deficit was 6.5% of the total economy. Economists think the trade deficit will keep rising in 2012. Read the full story here.