U.S. Current Account Shrinks to Lowest in Two Years

December 18, 2012 by Jon C. Ogg

cargo shipThe current account for the third quarter, a reading with what is now more than 75 days worth of a look-back, managed to show a decrease to -$107.5 billion. This is the lowest level in about two years as the cost of imports was lower during the period of July to September. Today’s data from the Commerce Department showed that the current account was roughly 2.7% of gross domestic product. Dow Jones had a consensus estimate of $102 billion.

This was the second contraction, as the prior quarter was revised to -$118.1 billion from a prior reading of -$117.4 billion. To show how much more narrow this was, the first quarter was shown to be -$133.6 billion.

While this is an important trade figure, we would remind investors again that this number has more than 75 days worth of time since the ending date in the period. This data is just not a huge number for investors and traders.

The current account is the measurement of the international trade balance of the United States in goods, services and unilateral transfers. It is measured quarterly, and this is combined with exports and imports to indicate trends in our foreign trade.

JON C. OGG

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