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US current account narrows sharply in second quarter
[WASHINGTON] The US current account deficit narrowed more than expected in the second quarter as trade receipts and investment income from abroad increased despite a strong dollar.
The Commerce Department said on Thursday the current account deficit, which measures the flow of goods, services and investments into and out of the country, fell 7.3 per cent to US$109.7 billion. The decline also reflected a decrease in government transfers.
Economists polled by Reuters had forecast the deficit falling to US$111.3 billion in the second quarter.
The second-quarter current account deficit represented 2.5 per cent of gross domestic product, down from 2.7 per cent in the January-March quarter.
The current account deficit has declined from a record high of 6.3 per cent touched in the fourth quarter of 2005 as rising domestic oil production keeps the import bill in check.
Exports of goods rose 0.5 per cent to US$384.8 billion in the second quarter. Overseas profits rose, despite the strong dollar. The greenback has gained 17.1 per cent against the currencies of the United States' main trading partners since June 2014.
Investment income receipts from abroad increased to US$200.1 billion from US$193 billion. That reflected increases in income from Ireland, the Netherlands and Bermuda.