U.S. current account deficit drops 6.5 percent in 1st quarter

The U.S. current account deficit fell by 6.5 percent, or 14.4 billion U.S. dollars, to 208.7 billion dollars in the first quarter of this year, the Commerce Department reported Friday.

The improvement in the current account, the broadest measure of trade and investment flows, surprised analysts who had been expecting a drop of just 1 billion dollars.

The U.S. current account deficit in the final quarter last year hit an all-time high of 223.1 billion dollars, according to the revised figures. The deficit in the final quarter was initially estimated at 224.9 billion dollars.

Even with the improvement, the deficit in the first quarter was still the second highest on record, putting the country on track to set another record for the entire year.

The current account deficit surged 19 percent in 2005 to 791.5 billion dollars from 665.3 billion dollars in 2004.

In the first quarter, the deficit in goods and services declined by 4 billion dollars to 190.7 billion.

Americans earned 1.9 billion dollars more on their overseas investments than foreigners earned on their U.S. holdings in the first quarter.

Source: Xinhua