Michael Schiavo pleads case on CNN
  MARTIAL LAW    
         

Alex Jones Presents Police State 3:  Total Enslavement

 

America Destroyed by Design

Mass Murderers Agree:  Gun Control Works!  T-Shirt

   
     
 

US current account gap widens

Reuters | June 17, 2005
By Doug Palmer

The U.S. current account deficit widened more than expected in the first quarter to a record $195.1 billion, driven by a growing merchandise trade gap and an increase in unilateral transfers, such as U.S. aid for tsunami victims, a government report showed on Friday.

The quarterly shortfall overshot Wall Street expectations for a $190.0 billion deficit. The Commerce Department also raised the current account deficit for the fourth quarter of 2004 to $188.4 billion, from $187.9 billion previously.

The current account, the broadest measure of U.S. trade with the rest of the world as it includes investment flows, ran at a record 6.4 percent of gross domestic product in the first quarter, the Commerce Department said. Economists generally consider that to be an unsustainably high level.

"Probably the main implication is that it does put some down pressure on the U.S. dollar. However, recently that pressure has been offset by the Fed's interest rate hikes, and that could continue," said Patrick Fearon, senior economist at A.G. Edwards & Sons in St. Louis.

The euro slipped against the dollar, trading at $1.2150 soon after the report from about $1.2175 shortly prior. The dollar rose against the yen, trading at about 108.95 yen from about 108.80 yen shortly prior.

U.S. Treasury debt prices showed little reaction to the data. The benchmark 10-year Treasury note was down 5/32 to yield 4.09 percent.

The first-quarter decline in the current account reflected a goods deficit which increased to $186.3 billion, from $182.2 billion in the fourth quarter.

"It's old data, so people have known it would be pretty poor. Basically the current account deficit will improve dramatically in the second quarter as we know the trade deficit has improved. There won't be too much lasting negative dollar impact," said Andrew Busch, global foreign exchange strategist for Harris Nesbitt in Chicago.

Increases in U.S. government grants and in private remittances and other transfers boosted net outflows of unilateral transfers to $27.1 billion in the first quarter, from $22.4 billion in the fourth. The increase was driven in part by American relief efforts to help victims of the tsunami that hit Southeast Asia in December.

"Unilateral transfers is one of the things that stood out, which is folks sending money back to other countries, to relatives and some of it also is investments. Private remittances rose, but the biggest increase is in government grants, which is probably for the tsunami," said Mark Vitner, senior economist at Wachovia Securities in Charlotte, North Carolina.

Concerns about the U.S. current account have contributed to the dollar's three-year decline against the euro and a basket of major currencies. The dollar depreciated another 1 percent in the first quarter, the Commerce Department said.

That followed declines of 5 percent in the fourth quarter and 8 percent for 2004 as a whole on a trade-weighted basis against a group of seven major currencies.

E-MAIL THIS LINK
Enter recipient's e-mail:

<< HOME

 
   
 

911:  The Road to Tyranny