Today came an economic report from the Commerce Department showing that the current account deficit narrowed in the second quarter to $117.4 billion. Dow Jones and Bloomberg were both calling for the reading to come in around $125 billion.
We also saw a downward revision in the first quarter's current account, falling from $137.3 billion to just over $133 billion. The first-quarter deficit was originally reported as the largest deficit since early on in the recession in fourth-quarter 2008.
In short, the deficit was 3% of gross domestic product in the second quarter, versus about 3.5% of GDP in the first quarter.
The U.S. current account is the measurement of the international trade balance in goods, services and transfers, and the level of exports, imports and the current account indicate trends in foreign trade.
It is important to understand that this is a backward-looking figure. It is also important to realize that oil prices were lower in the second quarter and have come back up since then.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Economy, International Markets