The current-account deficit in the United States narrowed more than forecast in the second quarter, helped by a pickup in exports and a bigger income surplus, Bloomberg reported. Nevertheless, economists expect the deficit to widen by the end of the year.
The gap, the broadest measure of international trade because it includes income payments and government transfers, shrank 12 percent to $117.4 billion from $133.6 billion in the first quarter, according to a Commerce Department report released this morning. The median forecast of economists in a Bloomberg survey called for a $125 billion deficit.
The trade deficit in goods and services, which accounts for most of the current-account gap, decreased to $139.3 billion in the quarter from $148.4 billion in the first three months of 2012, the report indicated.
Overseas sales may be harder to sustain during the rest of the year as an economic slowdown from Europe to China reduces demand for American-made goods. The balance of payments gap also is a reminder that the world's largest economy is dependent on foreign investors for funding.
"We're going to see the current-account deficit widen," Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pa., told Bloomberg. Sweet had projected a $118.8 billion second-quarter gap. "Exports are going to weaken, a reflection of the problems in Europe and slowing emerging markets. Trade may be neutral to a drag" on the economy, he said.
The gap represented 3 percent of gross domestic product (GDP) last quarter, compared with 3.5 percent in the prior quarter. The deficit reached a record high of 6.5 percent of GDP in the fourth quarter of 2005.