The U.S. current-account deficit widened in the first quarter of 2017, according to data released by the Bureau of Economic Analysis. The BEA said the deficit was $116.8 billion in the first quarter, up 2.4% from $114 billion in the fourth quarter of last year. Imports of crude oil, car parts, and factory supplies were seen as drivers of the deficit. The fourth-quarter deficit was previously estimated at $112.4 billion.
A group of economists polled by Reuters had forecast a higher deficit, $123.8 billion, for the quarter.
The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the goods and services it exports.
The BEA said the U.S. deficit on goods increased $5.3 billion to $200.3 billion, while there was a $3.6 billion decrease in the surplus on primary income. The deficit on secondary income, which includes government grants, pensions fines and penalties, and worker remittances, was $25.5 billion, down from a deficit of $31.3 billion in the fourth quarter.
The BEA said the increase on secondary income receipts was mostly due to an increase in government transfers. The increase in primary income reflected increases in direct investment income and in other investment income, primarily interest on loans and deposits.
The current-accounts deficit can be seen as a measure of the U.S.’s indebtedness to other countries. The figure reached a record high of 6.3% of gross domestic product in 2005. The current deficit represents 2.5% of GDP.
The current account is also the most complete measure of trade, claims CNBC, because it includes investment flows in addition to trade in merchandise and services.
President Donald Trump has promised to reduce the imbalance in trade with the rest of the world and campaigned on a pledge to renegotiate the North American Free Trade Agreement with Mexico and Canada to aid American workers. The president contends the deficit is evidence of the unfair practices of U.S. trading partners and costs factory jobs.
Net U.S. borrowing was $191.4 billion in the first quarter, the BEA said, up from $74.8 billion in the fourth quarter of 2016.