The US current account deficit was virtually unchanged in the second quarter, holding near the record set in the first three months of the year, its government said today.
The gap in the current account, the broadest measure of the nation's trade with the rest of the world, narrowed marginally last quarter to $138.67 billion from an upwardly revised $138.71 billion in the first quarter, the Commerce Department said.
The trade shortfall was close to financial market expectations.
Markets showed little reaction to the data and a separate report showing a small dip in business inventories in July. Many analysts believe the huge US trade deficits are unsustainable over the long run and raise the risk of a sharp correction and a weaker dollar.
The dollar did move lower against major currencies over the course of the past year, but has shown stability in recent weeks as signs of stronger economic growth have emerged.
The department said the shortfall in trade on goods widened to a record $138.0 billion from the first quarter's $136.0 billion, while the surplus in services trade rose to $14.6 billion from $14.4 billion.
At the same time, the deficit in government transfer payments, such as foreign aid and Social Security checks for Americans abroad, narrowed to $16.9 billion in the second quarter from $17.3 billion in the first three months of the year.
The department said a net $148.6 billion in foreign capital flowed into the US in the April-June period, marking an increase from the previous quarter.
The increase in investment flows came as overseas investors sharply stepped up purchases of US Treasury securities and became net buyers of US stock. They also bought more non-government securities.
In a separate report, the government said inventories at US businesses dipped in July amid strong sales. Inventories at the nation's manufacturers, retailers and wholesalers slipped 0.1 per cent in July to a seasonally adjusted $1.18 trillion, the Commerce Department said.