US current account deficit drops to $98.9 billion
WASHINGTON (AP) -- The U.S. current account trade deficit narrowed in the April-June quarter to the lowest level in nearly three years.
The imbalance fell to $98.9 billion in the second quarter, a drop of 5.7 percent from the first quarter deficit of $104.9 billion, the Commerce Department reported Thursday.
The spring deficit was the lowest since a $93.8 billion imbalance in the third quarter of 2009, a period when the Great Recession had cut into demand for foreign goods.
The current account is the country's broadest measure of trade. It tracks not only the sale of goods and services but also investment flows.
The improvement in the second quarter represented a drop in the deficit for goods and increases in the surpluses in services and investment income.
The sharp narrowing in the deficit in the second quarter was a major factor boosting the overall economy during that period. The economy grew at an annual rate of 2.5 percent in the second quarter, up from a growth rate of 1.1 percent in the January-March period.
A smaller trade deficit usually means that U.S. companies are producing more to meet domestic and overseas demand.
The smaller goods deficit reflected gains in exports of American-made airplanes and other capital goods. Imports were also up with the biggest gain in shipments of foreign-made autos and auto parts. However, oil imports fell during the second quarter.
The second quarter deficit was the equivalent of 2.4 percent of the total economy, down from 2.5 percent in the first quarter.