Strong imports prompt US current account gap to widen
THE US current account deficit increased to $119.3bn (£74bn) in the first quarter of the year on strong imports, the American commerce department said yesterday.
The gap was narrower than expected by many economists, who had anticipated a gap of around $126bn.
The deficit — which measures the flow of goods, services and investments in and out of the US — represented 3.2 per cent of the country’s GDP, up from three per cent in the fourth quarter.
The fourth quarter figures for 2010 were revised for technical reasons, with the gap measuring $112.2bn.
New applications for US unemployment benefits dipped in the latest week but remained at levels that were too high to put a dent in the unemployment rate.
Fresh new jobless claims fell to 414,000 in the week ended 11 June from an upwardly revised 430,000 in the prior week.
Meanwhile, the commerce department said housing starts rose 3.5 per cent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April’s steep decline.
However, factory activity in Philadelphia unexpectedly shrank in June to its lowest level in nearly two years in another sign of weakness in the US manufacturing sector.