US current account deficit expands to $116.8bn in Q1

WASHINGTON, June 20, (AP): The US deficit in the broadest measure of trade rose to the highest level in a year during the first quarter.

The Commerce Department said Tuesday the deficit in the US current account rose to $116.8 billion in the January-March period, up 2.4 percent from $114 billion in the last three months of 2016. The deficit was the largest since a $119.2 billion gap a year earlier.

The deficit in goods rose to $200.3 billion from $195.1 billion in October-December 2016 as imports grew faster than exports in the first quarter. Leading the increase in imports were industrial supplies, mostly crude oil. The goods gap was partly offset by a slightly higher surplus in trade in services.

The current account is the most complete measure of trade because it includes investment flows in addition to trade in merchandise and service. A deficit means the US is consuming more from overseas than it is selling abroad.

President Donald Trump has pledged to reduce the US trade deficit, contending that it costs US factory jobs and reflects unfair practices by America’s trading partners. He has promised to renegotiate the North American Free Trade Agreement with Mexico and Canada to get a better deal for American manufacturers and workers.

Meanwhile, interest rates on shortterm Treasury bills rose in Monday’s auction to their highest levels since October 2008.

The Treasury Department auctioned $39 billion in three-month bills at a discount rate of 1.01 percent, up from 0.99 percent last week. Another $33 billion in six-month bills was auctioned at a discount rate of 1.12 percent, up from 1.10 percent last week.