The US current account deficit widened sharply in the fourth quarter and was the largest since 2012, as exports and the primary income surplus fell.
The Commerce Department said on Thursday the current account gap, which measures the flow of goods, services and investments into and out of the country, increased to $113.5 billion from a revised $98.9 billion deficit in the third quarter.
That was the largest shortfall since the second quarter of 2012. Economists polled by Reuters had forecast the deficit widening to $103.2 billion from a previously reported $100.3 billion shortfall in the July-September quarter.
The current account deficit represented 2.6 per cent of gross domestic product, the highest since the fourth quarter of 2012, from 2.2 per cent in the third quarter. For all of 2014, the gap as a percentage of GDP was unchanged at 2.4 per cent.
The current account deficit has declined from a record high of 6.3 per cent in the fourth quarter of 2005, helped in part by a surge in domestic energy production that has reduced the US import bill.
In the fourth quarter, goods and services exports and income receipts fell 1.3 per cent to $820.9 billion, reflecting softer demand in Europe and Asia. The US dollar, which appreciated 6.2 per cent on a trade-weighted basis during the quarter, also hurt exports.
Robust consumer spending lifted imports 0.3 per cent to $717.5 billion.
The surplus on primary income fell to $50.6 billion in the fourth quarter from $59.8 billion in the prior quarter.
The deficit on secondary income increased to $37 billion from $34.8 billion in the third quarter. Secondary income receipts slipped to $27.3 billion in the fourth quarter from $28 billion in the third quarter.
Seperately, figures showed the number of Americans filing new claims for unemployment benefits rose only modestly last week, indicating the labour market remained on solid footing despite slowing economic growth.
Initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 292,000 for the week ended March 14, the Labor Department said on Thursday.
Claims for the prior week were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast claims rising to 292,000 last week.
Claims have bounced around for much of the winter as harsh weather either depressed or boosted filings. But through the volatility, the trend remained consistent with a strengthening jobs market. The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 2,250 to 304,750 last week.
The claims data covered the period during which the government surveyed employers for the March nonfarm payrolls report.
The four-week moving average of claims rose 21,750 between the February and March survey periods, suggesting payrolls could ease a bit from last month’s lofty level. The economy added 295,000 jobs in February, with the jobless rate falling to a more than 6-1/2-year low of 5.5 per cent. February marked the 12th straight month that employment gains have been above 200,000, the longest such run since 1994.
The Federal Reserve on Wednesday maintained its upbeat view of the labour market, and signaled it was nearing an interest rate increase by dropping the reference to being “patient” from its so-called forward guidance.
Reuters
