Nothing But Politics

[Rick Faurot]

U.S. Current Account Gap Grows to Record
Tue Sep 14, 2004 08:35 AM ET

WASHINGTON (Reuters) - The U.S. current account gap widened again in the second quarter, growing to a record $166.18 billion, the Commerce Department said on Tuesday.

The gap -- the broadest measure of trade and investment flows between the United States and the rest of the world -- came in well above analysts' expectations for a $159.35 billion shortfall and could fan concerns about the U.S. dollar and the nation's ability to continue to fund the deficit.

The gap in the first three months of the year was also revised upward, to $147.16 billion from the previously reported $144.88 billion.

The largest portion of the deficit continued to come from trade in goods and services, where a $163.58 billion shortfall in trade in goods was only slightly offset by a $13.29 billion surplus in services trade.

The surplus in investment income slid, further widening the gap. The surplus on international investment income fell to only $2.64 billion in the second quarter from $12.16 billion in the first three months of the year.