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Mohamed Mohamoud

Author and the owner of idman news

July 24, 2021

Idman news

Wararka Jaraaidyada Soomaalida ay qoreen

U.S. current account deficit surges to highest level in 14 years – no thanks to record trade gap


A measure of the nation’s debt to other countries surged by almost 12% in the first quarter to the highest level in 14 years largely because of record U.S. trade deficits during the pandemic.

The U.S. current-account deficit increased by $20.7 billion to $195.7 billion in the first three months of this year, the government said Wednesday. The deficit in the final quarter of 2020 was revised to $175.1 billion.

The biggest current-account gap since 2007 was tied to a record increase in the U.S. trade deficit in goods — autos, consumer products, industrial supplies and the like.

The U.S. economy has rebounded faster than most other countries, aided by massive federal stimulus. That’s enabled Americans to spend more on imports.

U.S. imports set a record high in March.

The slow recovery in the economies of other countries, on the other hand, depressed U.S. exports early in the pandemic and they still haven’t fully recovered to precrisis levels.

The current account tracks the flow of money between countries such as cash transfers, investments, profits and so forth. It also reveals if a country is a net lender or debtor.

The U.S. current account deficit was equal to 3.6% of gross domestic product in the first quarter, up sharply from 3.3% at the end of 2020.

That’s the highest level since 2008, when oil prices soared to as high as $150 a barrel and cause the U.S. trade deficit to explode.

The current-account deficit is still well below its 6.3% peak set in 2005, however, and economists predict it will subside as the rest of the world rebounds from the pandemic and U.S. exports fully recover.

The Dow Jones Industrial Average
DJIA,
+0.20%

and S&P 500
SPX,
+0.51%

were set to open mildly higher in Wednesday trades.



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Lasoco xaaladda EAST AFRICAN COUNTRIES ugu danbaysay ee Xanuunka CORONAVIRUS .