21 June 2001, 18:23 US Current Account balance-OVERVIEW
By Edward Kean
Washington, June 21 (BridgeNews) - The U.S. current account deficit
narrowed to a seasonally adjusted $109.6-billion in the first quarter,
narrowing from the record fourth-quarter trade gap of $116.3 billion, the
Commerce Department said Thursday.
Commerce revised the current account deficit for the fourth quarter from
the previously reported record of $115.3 billion.
The current account, the broadest measurement of U.S. worldwide
transactions, comprises goods and services trade, investment income and foreign
aid payments.
The current account deficit has widened sharply in recent years, stirring
concern over whether foreigners will remain willing to invest in U.S. financial
assets. But the value of the dollar has remained strong despite the widening
current account deficit as foreign individuals continue to find attractive
investment opportunities in the U.S.
Nonetheless, some Fed officials and private economists have expressed
concern that the dollar may eventually fall due to the widening trade deficit,
which could lead to higher inflation and higher interest rates.
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